BOCA RATON, Fla. – Dec. 14, 2016 – With rent growth flattening out and home prices continuing to shoot up, renting is starting to look like a better choice than buying in many U.S. cities for the first time in years.

Home-price appreciation outpaced rent growth in all 23 of the metropolitan areas tracked by a national index produced by Florida Atlantic University and Florida International University faculty.

The housing market shifted sharply in favor of buyers and away from renters in major U.S. cities four years ago as home prices plummeted and rents began a steep climb. But that situation is now changing.

“We’re trending back toward being renter friendly,” says Ken Johnson, a real estate economist at Florida Atlantic University.

Home prices jumped 5.5 percent in September compared with a year earlier, according to S&P CoreLogic Case-Shiller U.S. National Home Price Index – but rents in the third quarter increased 3 percent compared with a year earlier, according to apartment-tracker Axiometrics Inc.

When home-price growth outpaces rent growth, it can be a sign of a bubble because it indicates people are paying more than necessary merely to find a place to live. There is no indication that is happening this time, but in a few key markets the index is moving into alarming territory, study authors say.

In Dallas, Denver and Houston, for example, renting is the most favorable it has been in the history of the index, suggesting significantly overheated housing markets there.

Source: Wall Street Journal (12/14/16) Kusisto, Laura