This price-to-rent ratio helps assess whether it is more cost-effective to buy or rent a home in a given market. A high price-to-rent ratio suggests that buying a property is more expensive relative to renting, whereas a low ratio indicates that buying may be more favorable than renting.

• Price-to-Rent Ratio below 16: It's generally cheaper to buy a home than to rent.
• Price-to-Rent Ratio between 17 and 20: The cost of buying and renting is roughly comparable.
• Price-to-Rent Ratio above 21: It's generally cheaper to rent than to buy.