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Top 10 cities where renting is better than buying

(MoneyWatch) You've been told time and time again that buying a home is a better financial option than renting.

But that's not true everywhere. Despite the affordability of today's homes, there are a few cities around the U.S. where renting might be a better bet, at least in the short run.

Comparing buying versus renting costs is all about identifying the break-even point. It's a given that buying a home is more expensive upfront than renting. But at some point, owning typically becomes less expensive than renting.

The question is: how long does that take? If it takes more than a couple years before owning costs less than renting, you might be better off financially as a renter, especially if your long-term plans aren't that certain.

Real estate research firm Zillow did the math and factored in all kinds of possible costs, including monthly rent and mortgage payments, insurance, property taxes, maintenance and closing costs, and expected price appreciation to come up with the exact point at which buying becomes less expensive than renting.

In some cities, like Miami, it will take just two years on average before buying costs less than renting, making buying an attractive option. But elsewhere in the Northeast it will take upwards of four or five years before you're saving any money.

The longer it takes before buying becomes less expensive than renting, the less sense it makes to buy now. Check out the top 10 cities where renting could be better than buying.

Top 10 cities where renting is better than buying


10. St. Louis

Average home price: $161,300

Average rent price: $1,098

The Gateway to the West is a surprising addition to the top 10, buoyed by its tiniest neighborhood. If you buy a home in St. Louis, it will take 3.3 years to start saving money over renting. But in the Wydown Skinker neighborhood, where massive 1920s homes surround the city's premier park, it will take 7.7 years for buying to overtake renting on a dollars and cents basis. Elsewhere, such as in The Ville, it will only take 1.3 years for buying to be the better option.

Top 10 cities where renting is better than buying


9. Tie: San Francisco and San Diego

Average home price: $514,300

Average rent price: $2,560

San Francisco is one of the most expensive cities in the country, so it's no surprise that it'll take a while before buying becomes cheaper than renting -- 3.4 years to be exact. Downtown is the most expensive area in the city to buy a home, but no district offers a break-even point before two years.

Top 10 cities where renting is better than buying


San Diego

Average home price: $396,200

Average rent price: $2,125

On the other end of the West Coast, San Diego is also a city that lets renters breathe a little easier than owners. It will take at least two years anywhere in San Diego to make buying the better bet, but it will take 5.6 years in a neighborhood like Little Italy.

Top 10 cities where renting is better than buying


7. Tie: Los Angeles and Washington, D.C.

Average home price: $442,500

Average rent price: $2,308

Los Angeles offers a wide range of super-pricey homes, so it's no wonder that the city made the list. It will take an average of 3.5 years before buying becomes better than renting, but that number varies from 1.9 years to almost 13 years in the ritzier neighborhoods.

Top 10 cities where renting is better than buying


Washington, D.C.

Average home price: $351,300

Average rent price: $1,492

The nation's capital features a large variety of price points, with places like Friendship Heights and Georgetown taking 5 to 7 years to make buying the better choice, while Lincoln Heights and Langston will take only two years.

Top 10 cities where renting is better than buying


5. Tie: Philadelphia and Seattle

Average home price: $204,000

Average rent price: $1,492

It will take 3.6 years for a home in the City of Brotherly Love to cost less than renting, but Philadelphia has a huge range. Buying in the historic and lively neighborhood Old City will take 7.3 years to break even, while one of Fairhill's many row homes will take only a year.

Top 10 cities where renting is better than buying


Seattle

Average home price: $317,00

Average rent price: $1,645

Seattle is expensive, averaging 3.6 years to break even between buying and renting. It will take between 2.3 and 4.9 years before buying beats renting in the Emerald City.

Top 10 cities where renting is better than buying


3. San Jose, Calif.

Average home price: $637,900

Average rent price: $2,662

San Jose takes third on the list, thanks to rapidly rising home prices. It takes on average 3.7 years to break even there. But if prices keep going up, it could make buying even less desirable financially.

Top 10 cities where renting is better than buying

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2. Boston

Average home price: $321,000

Average rent price: $1,993

Unlike some other cities on the list, Boston is pretty expensive no matter where you want to buy. It will take an average of 4.1 years to break even if you buy a home rather than renting, with West Cambridge taking an extra year beyond that. The best you could hope for in Boston would be a break-even point of 2.6 years in Mattapan.

Top 10 cities where renting is better than buying


1. New York

Average home price: $344,200

Average rent price: $2,700

It's no surprise to see New York City top the list, where it's expensive to buy and to rent. It will take more than five years before you see any savings by being a home buyer in the Big Apple. But it's not hopeless. If you buy in the Parkchester neighborhood in the Bronx, it'll take 2.5 years to break even. In the Carnegie Hill neighborhood on the Upper East Side of Manhattan, it'll take 11.5 years to see anything in the way of savings.

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