The 10 cheapest housing markets (© Getty Images)

Pittsburgh ranks No. 2 in BusinessWeek's rankings of America's cheapest housing markets. © Getty Images

Home prices have dropped so much that the cost to own and maintain a house in many metros is only a bit more, and sometimes even less, than the cost of renting.

BusinessWeek.com teamed up with research firm Reis to rank 20 metros where it's almost as cheap to buy as it is to rent. (Reis made the calculations using its own second-quarter rent data and second-quarter home value data from Zillow.com.) We found two metros, Detroit and Pittsburgh, where renters can actually lower their monthly expenses by buying. The rest of the list, featuring metros where buying was only slightly more expensive, included Rochester, N.Y.; Memphis, Tenn.; Tampa, Fla.; Cleveland, Tenn.; Columbia, S.C.; Dallas; Las Vegas; and Providence, R.I.

To create a fair matchup between owning and renting, we calculated ownership costs assuming a fixed 30-year loan for 100% of the purchase price with no down payment. If we had instead decided to factor in a 20% down payment, owning would have been the cheaper option for the top 10 metros on our list.

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"It's a great time to buy," says Mollie Carmichael, senior vice president of John Burns Real Estate Consulting in Irvine, Calif. "If you can own a home for less than the cost to rent, then it's a logical financial proposition."

An opportunity for new buyers
The housing slump has brought the own-versus-rent equation closer to where it was before the housing bubble drove sale prices way above rental costs. (Rents are also falling now, but at a much slower pace.)

Slide show:  The 10 cheapest housing markets

The foreclosure crisis has trampled down prices from Tampa to Riverside, Calif. And low interest rates and government incentives such as the $8,000 first-time homebuyer federal tax credit, which expires this year, are attracting new buyers previously priced out of the market. The American dream is getting more affordable. In Tampa, for example, owning was 15% more expensive than renting in the second quarter. But it was 46% more expensive than renting a year earlier.

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Bing: Search & decide

Greg Ghodsi, senior vice president at Raymond James in Tampa, says buying a principal residence in Florida now makes more sense than it did during the housing boom.

"If you have a job and are looking for a primary residence, you can get places here in Tampa that aren't cheap, but relative to where they were, are fairly priced compared to renting … The whole equation has changed," Ghodsi says.

Be prepared to stay awhile
Of course, different people have different notions of what cheap means and buying isn't an option for everybody. Many renters are now losing jobs and banks are raising standards for mortgages. And the housing market still poses significant risks as prices continue to fall and foreclosures rise. Stan Humphries, chief economist at Zillow.com, says prices are likely to continue to fall and then begin to appreciate slowly, so buyers should plan to stay put for a minimum of five to eight years or risk making a loss.

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"It's a fool's errand to try to time the bottom for both economists — and buyers and sellers," Humphries says. "If you found a house that you love and want to be in for a long period of time, now is potentially a good time to wade into the market."

With the first-time homebuyer tax credit expiring and the possibility that interest rates will start rising, it might pay to act quickly, says Victor Calanog, director of research for Reis. But rents are dropping, too, so tenants might also be able to cut monthly expenses by seeking out apartments with lower rents or concessions, he says.

"This might be the time to seriously evaluate the decision of whether to rent or own," Calanog says.

The 10 cheapest housing markets

  1. Detroit
  2. Pittsburgh
  3. Rochester, N.Y.
  4. Memphis, Tenn.
  5. Tampa, Fla.
  6. Cleveland, Tenn.
  7. Dayton, Ohio
  8. Columbia, S.C.
  9. Orlando, Fla.
  10. Dallas-Fort Worth

View the rest of the top 20 cheapest housing markets on BusinessWeek.com.