Home prices have taken such a beating and demand for rental units has increased so much that it's now cheaper to buy a two-bedroom home than to rent one in most major U.S. cities.
According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.

Sanjay Jain called his real estate broker four days ago to cancel a deal to buy a three-bedroom home in Folsom, California, unnerved by another plunge in the most volatile equities market on record.
“Seeing what’s happening on the stock market made me think that it’s not a good time to be buying a home,” Jain said. “I’m going to wait and see.”

Laid off several years ago from a $12-an-hour job as a housekeeping supervisor at a ski lodge, she took a job at a local McDonald’s, where she earns just $9 a hour. Cable TV and a phone are luxuries she simply cannot afford; some months she runs out of money to buy food for her two children.

“I feel like I’m going backwards,’’ Shoestock said, hot and tired after a recent shift. “Sometimes I feel like I work just to work.’’