![\"Renting](\"https:\/\/biznews.fiu.edu\/wp-content\/uploads\/2020\/07\/buy-vs-rent-real-estate.jpg\")
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The cost of homeownership is outpacing the cost of renting in major markets, according to the latest\u00a0Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index<\/a>, and making renting more affordable. In the first quarter of 2020, renting was a smarter choice in cities across the\u00a0Southeast, Midwest, and Pacific Northwest. The current index includes only the first three weeks of the COVID-19 pandemic.<\/p>\n Published quarterly, the index tracks 23 metropolitan markets and is produced by produced by Eli Beracha and William Hardin, professors at FIU Business\u2019\u00a0Hollo School of Real Estate<\/a>\u00a0Ken Johnson, a real estate economist and professor at Florida Atlantic University.<\/p>\n The current numbers show that Atlanta, Dallas, Denver, Houston, Kansas City, Miami, Pittsburgh, San Francisco, Seattle and Portland, Oregon, all have increasingly higher home price levels, making renting the better option.<\/p>\n \u201cThese metro areas are the most at risk for home price declines, including any future negative impacts to housing values brought about by COVID-19,\u201d said Ken Johnson, associate dean of graduate programs at Florida Atlantic University\u2019s College of Business. \u201cWe\u2019re still waiting to see how the pandemic will affect the housing market.\u201d<\/p>\n The other markets tracked in the index – Boston, Chicago, Cincinnati, Cleveland, Detroit, Honolulu, Los Angeles, Milwaukee, Minneapolis, New York, Philadelphia, San Diego and St. Louis \u2013 maintain stable housing markets.<\/p>\n \u201cMarkets where renting is preferred usually display high price-to-rent ratio and\/or limited up-side appreciation potential in the medium term,\u201d said\u00a0Beracha<\/a>, director of the Hollo School of Real Estate. \u201cThe opposite is true for markets where buying is preferred.\u201d<\/p>\n He pointed out that the buy vs. rent analysis is set up as a \u201chorse race\u201d comparison to measure the overall wealth creation benefit that each option presents.<\/p>\n The BH&J Index determines whether consumers will create wealth faster in buying a home and building equity or renting the same property and reinvesting the money they would have spent on ownership, such as taxes, insurance and maintenance. Renters who would not invest the money they would have spent on ownership are better off buying a home.<\/p>\n \u201cHomeownership doesn\u2019t necessarily generate attractive rates of return, but it does force consumers to be more mindful of their expenses,\u201d he said. \u201cRenters should be honest with themselves. If they aren\u2019t going to put their extra money into the stock market, then the safer option over the long run would be to own.\u201d<\/p>\n