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FAU Study Shows Home Price Corrections Most Likely in Washington, Texas, Utah and North Carolina

Renting Beats Buying in All 100 Markets Surveyed

Boca Raton, FL – Spokane, Washington and Austin, Texas are the two U.S. housing markets most exposed to price corrections, meaning consumers in those areas should strongly consider renting rather than buying, according to a new report from researchers at Florida Atlantic University and Florida International University.

The BH&J National Price-to-Rent Ratios Monthly Report measures the relative cost of owning to renting in 100 metropolitan areas nationwide.

Ken H. Johnson, Ph.D., an economist in FAU’s College of Business, also co-authors separate monthly indexes revealing the most overvalued U.S. markets for home prices and rents. Price-to-rent ratios offer a more complete picture because they show the relative choice within a housing market between buying and renting.  

Spokane leads the U.S. with a price-to-rent ratio of 32.08 percent above the long-term average, followed by Austin’s 29.62 percent. Nashville, Tennessee (26.68 percent); Raleigh, North Carolina (25.86 percent); and Seattle (24.58 percent) complete the top five.

Washington, Texas, Utah and North Carolina each have two metros ranked in the top 10. The full rankings can be found here.

“In markets with these high ratios, it is reasonable to expect price corrections because renting is much more favorable there,” Johnson said. “Renting will slow down demand for homeownership, which will, in turn, affect prices.”

Many of the highest price-to-rent ratios are in Western U.S. markets. Even though Florida has some of the nation’s most overvalued housing and rental markets, the price-to-rent ratios are fairly low.

“The recent spike in metro Miami rents has helped keep the price-to-rent ratio in the area relatively near its average,” said William G. Hardin III, Ph.D., dean of FIU’s College of Business. “But it will be the production and delivery of new homes and apartments that will ultimately drive long-term housing affordability in the area.”

Despite rapidly rising rents over the past two years, renting is the better option in all 100 markets surveyed, according to the report.

Stamford, Connecticut (4.52 percent); Virginia Beach, Virginia (4.76 percent) and Syracuse, New York (4.90 percent) have the three lowest ratios.

“In these markets, renting still beats buying, but the decision isn’t as clear-cut as it is in Spokane and other metros with much higher ratios,” said Eli Beracha, Ph.D., of FIU’s Hollo School of Real Estate.

The researchers calculate the price-to-rent ratio as the average home price for an area divided by the area’s annual rents for the average property. Data is provided from the Zillow Home Value Index and the Zillow Observed Rental Index and includes single-family homes, townhomes, condominiums, co-ops and apartments.

About Florida Atlantic University:
Florida Atlantic University, established in 1961, officially opened its doors in 1964 as the fifth public university in Florida. Today, the University serves more than 30,000 undergraduate and graduate students across six campuses located along the southeast Florida coast. In recent years, the University has doubled its research expenditures and outpaced its peers in student achievement rates. Through the coexistence of access and excellence, FAU embodies an innovative model where traditional achievement gaps vanish. FAU is designated a Hispanic-serving institution, ranked as a top public university by U.S. News & World Report and a High Research Activity institution by the Carnegie Foundation for the Advancement of Teaching. For more information, visit

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