The Census Bureau has released the latest estimates from the American Community Survey data to estimate the price to rent ratio. We have crunched the numbers and the rankings are in. See the ZIPs in Tennessee with the lowest price to rent ratio below, and the highest price to rent ratio ZIPs. Only ZIP codes with a low margin of error are included.
The price to rent ratio is the median home value divided by the median annual rent. At its most basic level, the ratio is a benchmark for understanding whether it is better to rent or buy in an area. When home prices rise significantly faster than the local rents, the ratio will rise - indicating a possible housing bubble where it may be better to rent. Anything under 15 indicates that it is likely more affordable to buy, and areas over 20 are likely better to rent.
The Tennessee price to rent ratio from the latest estimates is 21.0 and has risen 1.6% from 20.6.
This year saw several big changes. 38127 (Memphis, TN) rose from #3 to #1, 38108 (Memphis, TN) fell from #1 to #2, 38141 (Memphis, TN) fell from #2 to #3, 38114 (Memphis, TN) rose from #7 to #4, and 38106 (Memphis, TN) fell from #4 to #5.