Rent vs. buy: Top five cities where it's better to buy (or rent) a home

Updated
house with sale pending sign
house with sale pending sign

With interest rates on 30-year mortgages hitting yet another record low this week -- 4.27%, according to Freddie Mac -- it makes sense to rush out and buy a home, right?

Maybe not. New York-based real estate research firm Reis Inc. reported Thursday that a surge of renters in the third quarter pushed the national apartment vacancy rate down to 7.2%, from 7.8% the quarter before, one of the steepest drops ever. So more people are renting. And somewhat surprisingly, despite the strong rental demand, rent prices have remained relatively flat. So it's better to rent, right?

If you're confused, keep this in mind: Whether it's more economical to buy or rent depends on where you live.

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