Beracha and Johnson Price-to-Rent Ratios

The top 10 most expensive housing markets in the US

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Beracha and Johnson Price-to-Rent Ratios

OXFORD, Miss. – The latest (October 2024 data) results of the Beracha and Johnson Price-to-Rent Ratios are out.

Ranked by order of a premium (measured in percentage terms) in average dollars paid in-home price to avoid one dollar in annualized rent in a housing market.

The top 10 most expensive housing markets in the US
Rank	Metro Area	Premium
1.	McAllen, TX	21.89%
2.	San Jose, CA	21.67%
3.	Charlotte, NC	13.51%
4.	Durham, NC	13.29%
5.	Nashville, TN	12.70%
6.	Rochester, NY	12.47%
7.	Raleigh, NC	12.06%
8.	Wichita, KS	11.85%
9.	Seatle, WS	11.58%
10.	Atlanta, GA	11.38%

The Beracha and Johnson Price-to-Rent Ratios monthly report examines the largest 100 U.S. housing markets in terms of population and ranks them from most to least expensive in terms of average price to average rent. The percentage difference between where the current price-to-rent ratio presently rests and what is the average historical price-to-rent ratio is used to rank order the surveyed metros and highlight the magnitude of the difference between current and typical price-to-rent ratios.

Positive and higher premiums favor renting over owning, while lower premiums favor owning over renting.

"To put it bluntly, homes to own cannot be built fast enough in North Carolina to catch the incoming population. In time, the supply of homes will catch up to the demand for homes in the state and a more normal relationship (lower price-to-rent ratios) between renting and owning will resume." – Ken Johnson

Highlights of this Month’s Report

But for a noticeable concentration in North Carolina, there does not seem to be any regional tendency for high price-to-rent ratios as the Top 10 most expensive housing markets are spread out around the nation.
Seven of the Top 10 metros (McAllen, TX; Charlotte, NC; Durham, NC, Nashville, NC; Raleigh, NC; Seattle, WS; and Atlanta, GA) appear to be experiencing significant growth in population.
An imbalance in the timely supply of local housing units relative to the demand for units seems to be a common theme for McAllen, TX; Charlotte, NC; Durham, NC, Nashville, NC; Raleigh, NC; Seattle, WS; and Atlanta, GA.

"San Jose, CA; Rochester, NY, and Wichita, KS are telling a different story. Here demand and supply of housing units (doors to live behind and own plus doors to live behind and rent) appear to be in balance; however, the relative shortage of units to own versus sufficient units to rent appears to be driving prices up." – Eli Beracha