Survey: It's better to buy than rent in Toledo
6/5/2018When choosing a home in Toledo, it is far better to buy than rent, according to a report released Tuesday by an Internet-based insurance firm.
In fact, Toledo has the third-lowest price-to-rent ratio in the country — meaning the numbers heavily favor buying a home rather than renting, according to Haven Life, an online life insurance agency owned by Massachusetts Mutual Life Insurance Company.
Haven Life gathered data from the 200 most populous cities to determine where it makes sense for people to buy a home and where they’re better off renting. Data included monthly median price-to-rent ratios, home listing prices, rents, and state-specific mortgage rates, which it obtained from the Zillow Group.
It came up with its price-to-rent ratio, that is, how long it takes to break even on a house when looking at home prices compared to annualized rents for a given location.
A ratio less than 15 meant it is more favorable to buy, while more than 16 meant it is better to rent.
Toledo’s ratio through the first quarter of 2018 was 6.93, or 42 percent below the 16.5 national average. Cleveland had the lowest ratio, 6.04, which was 49 percent below the national average.
“The rental rates in Toledo have definitely gone up over the last five years or so,” said Doug Kwiatkowski, president of the Toledo Regional Association of Realtors.
“Some of my clients who are looking to buy and who are renting now say it’s amazing what they can get for the same amount of money,” he added.
Haven Life said the overwhelming number of cities with the highest price-to-rent ratios are in California, and none have ratios considered favorable for buyers.
The largest number of cities with the lowest price-to-rent ratios are located in the South and the Midwest.
Toledo’s ratio actually has gone up 9 percent over the last five years. Still, the average monthly mortgage payment in Toledo is $288 while the average monthly rent payment for a two-bedroom apartment is $786.
The median priced home in Toledo in the first quarter was $71,600.
Haven Life compiled lists of the 25 cities with the lowest ratio and the 25 with the lowest ratio.
Besides Cleveland and Toledo, Ohio cities among the 25 with the lowest ratio included No. 5 Akron (7.5 ratio) and No. 24 Cincinnati (9.14 ratio).
The city with the highest ratio — and a monthly rent of $3,741 and a median priced home at $1.4 million — was a Silicon Valley enclave, Sunnyvale, Calif., at 39.31. Another San Francisco bay area locale, Fremont, Calif, was No. 2 with a ratio of 27.24 and a monthly rent of $3,133 and a median price home of $979,277.
Mr. Kwiatkowski said while Toledo provides good value for home buyers, it still is beset by low inventory.
“Our local for-sale market has limited inventory and the rental house market is even worse,” the Realtors group president said.
Contact Jon Chavez at jchavez@theblade.com or 419-724-6128.