Abstract
Home prices and rent prices in the USA have been growing steadily over the past decade. However, the COVID-19 pandemic has decimated entire sectors of the American economy, which makes the homebuying decision more intricate. We mapped multiple metrics to indicate the best place to buy a house amid COVID-19. For many counties in the central area of the USA, the price-to-rent ratio highly recommends people to buy a house, but the home prices have declined since the outbreak of COVID-19. The price-to-rent ratio and increasing home price suggest that people should not buy a home in big coastal cities under the current circumstances.
As the USA has become the new epicenter of the COVID-19 pandemic, the decision to buy a home becomes more complicated. Due to the nationwide stay-at-home orders, the US economy shrank in the first quarter by its fastest rate (4.8%) since the 2008 financial crisis (Badkar et al., 2020). On 15 March 2020, the Federal Reserve cut interest rates to near zero in an attempt to prop up the US economy. Although home prices in the US have been experiencing a boom after the 2008 economic recession (Shiller, 2018), how home prices have changed and where to buy homes are questions that urgently need answering for homebuyers amid the ongoing COVID-19 pandemic. The void of guidance on where to buy a home could force people into a dilemma. Compared to homebuyers, people who rent have the flexibility to rapidly leave an area. The decision to rent also depends on how long people will live in an area. Hence, our main goal was to provide direct evidence for potential home buying opportunities.
To unveil the housing market, we analyzed the data from the Niche 1 in June 2020, including the median home price, the monthly median rent, the median household income, and the percentage of homeowners. As shown in Figure 1a and Figure 1b, we then calculated the price-to-rent ratio (median home price/(median monthly rent*12)) and price-to-income ratio (median home price/median household income), respectively. Specifically, as a metric that measures the relative affordability of renting and buying in a given housing market, a price-to-rent ratio below 15 indicates it is preferable to buy a house; a price-to-rent ratio of 15 to 21 indicates there is no strong preference of buying or renting a house; a price-to-rent ratio higher than 21 indicates it is highly recommended to rent a house (Trulia, 2010). We also mapped the percentage of homeowners to show the true number of homeowners (Figure 1c). Using the data from October 2019 and the data from June 2020, we separately mapped the absolute dollar change of home price (Figure 1d) and the percentage change of home price (Figure 1e).

Cartogram maps of home buying and renting patterns.
We found three novel findings. First, the price-to-rent ratio highly recommends that people should buy a house in the central area of the USA. The percentage of homeowners is also high in the central area, meaning that the majority of residents have already bought homes. However, the home prices have declined amid COVID-19 in some counties in the central area, which provides an early alert for potential home buyers. Second, the price-to-rent ratio suggests that people should not buy a house in coastal cities, such as Los Angeles, San Francisco, and New York City. What is more, the increased home prices in these cities further suggest that it might not be good timing to buy a house. Further, the price-to-income ratios of coastal cities are relatively higher, indicating that residents’ earnings may not be enough to afford a home. Third, and especially noteworthy, is that the tanking economy did not bring nationwide home prices down, although the home sales saw a steep decline in mid March due to the outbreak of COVID-19 (Andrews, 2020). The major reason is that both supply and demand have also dropped in the majority of US cities (Olck, 2020), but are not seeing dropping prices. There are already signs that buyers are coming back to the housing market since May because the country started reopening the coronavirus-closed economy (Andrews, 2020). However, we acknowledge that the risk of price decline still exists because the spike of Covid-19 cases is continuing in the USA, surging to an all-time high of 45,300 new daily cases on 26 June 26 2020.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
