January 28, 2011 (Shirley Allen)

The tables have finally turned on the buying versus renting debate. During the housing boom as home prices became insanely high, it was far cheaper to rent than to buy a home, unless of course you got one of those great one percent teaser loans, but that didn’t work out well for most people.

It’s now cheaper to buy a home rather than rent one in 72 percent of the 50 largest U.S. cities, according to Trulia’s rent vs. buy index, which compares the total cost of home ownership to the cost of renting.

“Since the start of the ‘Great Recession,’ many former home owners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”

Trulia compared the median list price of a two-bedroom home with the median price paid for rent in 50 cities. The company then assigned a price-to-rent ratio to each city, with any number below 15 signifying a homebuyer’s market and any number above 21 signifying a renter’s market. Any market between those two numbers has more balanced rent versus buy costs.

The cities where buying was deemed more affordable than renting tended to be those with high levels of foreclosures and unemployment, factors which also reduce the pool of qualified buyers. The two cities where buying was deemed most affordable were Miami and Las Vegas, both of which have regularly ranked among the nation’s hardest-hit housing markets since the economic downturn began. In both cities, median home prices were only six times the median annual rent for a two-bedroom home.

Rounding out the top ten were Arlington, TX, Mesa, AZ, Phoenix, AZ, Jacksonville, FL, Sacramento, CA, San Antonio, TX, Fresno, CA, and El Paso, TX.

According to the report, the top 10 cities deemed more affordable to rent over buying were New York, NY, Seattle, WA, Kansas City, MO, San Francisco, CA, Memphis, TN, Los Angeles, CA, Fort Worth, TX, Oakland, CA, Portland, OR, and Albuquerque, NM.

“Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers,” said Tara-Nicholle Nelson, a Trulia spokeperson. “For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of long-time homeowners are finding themselves tenants – some by choice and others by necessity.”

To read the full report and see the total list of cities, click here.

Tags: rent vs buying, home prices, cost of home homeownership, great recession, median list price, affordable, market conditions, price-to-rent ratio