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Posted: 12:00 a.m. Tuesday, May 18, 2010

The cost of renting vs. owning in major metro areas


CLARKONOMICS: Economy.com has done a new analysis of the cost to rent versus own in major metro areas around the country.

The single best place to own is Pittsburgh. Other top spots include Detroit and Cleveland. However, you might not want to buy in Detroit because of the sour job market.

Remember, if you buy, your goal should be to own for a substantial amount of time, at least seven years. But to buy and have to sell again before that seven-year window because you can't find a job is an empty victory that's actually a defeat.

Other cities where it makes sense to own rather than rent include Phoenix, Riverside-San Bernardino, Calif., Las Vegas, Tampa, Indianapolis, Minneapolis, Atlanta, St. Louis, Dallas, New York (except Manhattan), Miami, Los Angeles and Fort Lauderdale.

The cities where it may be a better deal to buy vs. rent (though it's not a slam dunk) include Chicago, Houston, New Orleans, Sacramento, Oklahoma City, Philadelphia, Salt Lake City, Boston, Baltimore, Hartford, Washington, D.C., and Palm Beach County, Fla.

Now we reach the final third: The places where it's much smarter to rent instead of own. These include Oakland, Calif., Honolulu, San Jose, Calif., San Francisco, Seattle, Orange County, Calif., Portland, Ore., Charlotte, N.C., Raleigh, N.C., North-Central N.J., Denver, San Diego, Long Island, Milwaukee, Memphis, Tenn., and Austin, Tex.

To drill down to your individual purchase decision, you've got to consider the cost of the house you want vs. the amount of rent you currently pay. Try the java-enabled rent vs. buy calculator at DinkyTown.net to help you in the decision.