It’s cheaper to rent than to buy in San Francisco because of those stratospheric home prices. That’s not to say that San Francisco rentals are “cheap,” but Trulia’s latest Rent vs. Buy report shows you’ll save more money if you rent your place in San Francisco. It also provides a look at the difference between renting and buying in 98 other metros. 
Trulia started producing this report five years ago, and this is the first time renting has been better than buying in any city. And, it’s not just San Francisco. Renters save even more in the South Bay city of San Jose. For renters in San Jose, the savings is 12.2%. In San Francisco, it’s 5.8%.
Trulia points out that those two markets are not representative of other metros, however, due to the ultra-high home prices. But, it says, the gap is narrowing in many cities, to the point where there’s just a slight advantage in buying over renting.
Honolulu, Hawaii, has the slimmest advantage for buyers. They get a 2% premium for buying over renting. Detroit is at the other end of the spectrum. There, the differential is 48.9% in favor of the buyers.
Buyers Advantage in Detroit
Detroit home prices are some of the lowest in the country right now. It’s the only metro on the list where you buy a home for less than six or seven figures. According to RentCafé, the median sales price is about $70,000 . Zillow says it’s $36,000. The figures seem to vary a lot depending on which real estate website you check, but they are much lower than all the other major markets right now.
And, Detroit is rebuilding so population and job growth are strong, and that means rents are healthy for landlords. RentCafé says, the average rent rose 5% in the last year to $850 a month. Zillow says it’s $800. According to some of our own calculations at RealWealth, landlords can see gross yields of almost 16% because of the low home prices, and strong rental returns.
Detroit prices are also among the fastest rising home prices in the country, because they are so low compared to other markets. They went up 18.3% in the last year. That’s the second fastest growth in the nation, behind Silicon Valley’s San Jose. But even with the rapid price appreciation, it’s still 48.9% cheaper to buy than to rent in Detroit.
Buyers Get Better Deal
Some of the other metros where it’s much cheaper to buy homes than to rent are included on our list of hot single-family rental markets. While the gap doesn’t represent your return-on-investment, it does mean home prices are on the low side as compared to the market rate for rent.
Good rental markets where buyers are getting some of the best deals include:
Houston, Tampa, Cincinnati, Jacksonville, Atlanta, Orlando, Pittsburgh, and Columbus. They have a buyer’s advantage that ranges from 39.8% in Houston to 32.1% in Columbus.
Other markets with less than 20% margins between buying and renting include Seattle; Portland, Oregon; Madison, Wisconsin; Milwaukee; Sacramento; Oakland; Las Vegas; Anaheim, California; Salt Lake City; Newark, New Jersey; New York; San Diego; Cambridge, Massachusetts; and Ventura County, California.
 RentCafé Study