Why Rent When You Can Buy?

Home prices have dropped so much that the cost to own and maintain a house in many metros is only a bit more, and sometimes even less, than the cost of renting.

BusinessWeek.com teamed up with research firm Reis to rank 20 metros where it's almost as cheap to buy as it is to rent. (Reis made the calculations using its own second-quarter rent data and second-quarter home value data from Zillow.com.) We found two metros, Detroit and Pittsburgh, where renters can actually lower their monthly expenses by buying. The rest of the list, featuring metros where buying was only slightly more expensive, included Rochester, N.Y.; Memphis; Tampa; Cleveland; Columbia, S.C.; Dallas; Las Vegas; and Providence.

To create a fair matchup between owning and renting, we calculated ownership costs assuming a fixed 30-year loan for 100% of the purchase price with no down payment. If we had instead decided to factor in a 20% down payment, owning would have been the cheaper option for the top 10 metros on our list.

"It's a great time to buy," says Mollie Carmichael, senior vice-president of John Burns Real Estate Consulting in Irvine, Calif. "If you can own a home for less than the cost to rent, then it's a logical financial proposition."