Home Price vs. Rent Ratio

What is price vs. rent ratio? The price-rent ratio is a great way to compare the costs of buying and renting both within a city and is useful to compare against other cities as well. Technically it is the average cost of ownership divided by the received rent income if buying to let. The formula is House Price / (Monthly Rent x 12).

How do we calculate it? Using list price data from HomeFinder.com and rental data from Apartments.com, the ratio was calculated on a city-by-city basis using average list prices compared with average monthly rents on 2 bedroom homes and apartments.

Find Your City Ratio!

Atlanta, GA

Home Price-Rent Ratio

Metric economists use this to compare housing affordability of different markets

13:1

Low Home Price-Rent Ratio

High Home Price-Rent Ratio

Atlanta, GA has a Price-Rent Ratio of 13 to 1.
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Comparison based on Atlanta homes for sale and Atlanta apartments for rent.

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Use this key for the price-rent ratio

1-10

It is less expensive to own than to rent a home in this city depending on factors such as length of ownership.

11-20

The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation.

21 or greater

The total costs of owning a home in this city are greater than the costs of renting depending on factors such as length of ownership.

Note that this index is a broad measure. Contact a local agent to understand local market conditions.

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