With 3.99% mortgage rates, now might seem like a great time to buy in most of the country. Actually, according to the Trulia price-to-rent ratio, anything under a ratio of 15 means it’s better to buy. Michigan and Ohio are two states where buying makes much more sense.

However, some cities are still too expensive to justify buying unless you can afford it. Take for instance, New York City. Want a 2-bedroom, 2-bathroom condo in the city? How does $1.1 million sound? Or what about San Francisco? Though rents might be skyrocketing because property values are on the rebound, buying might only be beneficial for top income earners or the 1%.

Even in my neighborhood, a suburb of Los Angeles, homes are averaging $400K+. Using a rent to buy cost calculator, a $400,000 house might be a better option if I had 20% down, was going to stay in the home for 10-years and my rent was more than $2,300 a month. Since my rent is a little less than this and I don’t have $80,000 to put down on a house, renting makes more sense for now.

Yet, if I do move to say Sacramento or a less expensive area, buying would make more sense depending on going rental rates. Of course, I can’t justify renting on a calculator alone. There is something about owning a home and having the freedom to modify it the way I want. Owning a home also makes more sense in the long run; someday the home will be paid off free and clear (except for insurance and taxes of course!)

Buying is still in my future, but things will have to line up perfectly. (or close to it.) 😉

What’s the price-to-rent ratio in your city?