Rising home prices are forcing many would-be buyers to retreat into the rental market, but rents are following a similar trajectory in most major U.S. cities, SmartAsset reports. The median rent for a one-bedroom apartment rose 13.2% year-over-year in April, and while many metros are more expensive for homebuyers, renters are grappling with even more challenges in other locations.
Seven of the top 10 cities with the highest price-to-rent ratios are located in California, where the average home sale price is up to a whopping $916,071, while a year’s worth of rent averages around $27,233. On the contrary, price-to-rent ratios are low in midwestern cities like Detroit, Cleveland, Milwaukee, Chicago and Indianapolis.
San Jose, California has the highest price-to-rent ratio of the 50 large cities that we examined. Between March 2021 and February 2022, the average price of a home in this Bay Area city was $1,261,667, second-highest across our study. While San Jose also had the fifth-highest average annual rent during that same time period ($2,494), a typical home still costs 42.16 times more than a year’s worth of rent.
No city has more affordable homes than Detroit, where the average sales price was just $75,667 from March 2021 through February 2022. With rent averaging $1,084 per month, the average home is just 5.82 times more than a year’s worth of rent.