Renting looks to be the best option for some tenants across the country, even as rents edge above historical averages, because house prices are soaring and mortgage rates keep rising.

Spokane, Washington, is No. 1 in the nation where renting is better than buying out of the 100 areas tracked in an index created by Florida Atlantic and Florida International universities that measures the ratio of home prices to rent.

Spokane is followed by Austin, Texas; Nashville, Tennessee; Raleigh, North Carolina; and Seattle to round out the top five areas on the index, which came out last week and could be used for apartment investors and developers in their decision-making.

The issue of renting versus buying is taking on greater importance as the Federal Reserve raised its target lending rate Wednesday for the fifth time this year, moves that boost mortgage costs. And construction starts for new apartment and condominium projects in August hit their highest level in 36 years, even as a drop in plans for future building signals a slowdown could be looming.

All 100 areas the researchers tracked showed a premium of home prices to renting an apartment, house, townhouse or condominium, based on the latest available data from July. The premium or discount is determined by dividing the area’s average home price by annualized rent. Of the 100 areas making up the largest housing markets in the United States, 80 markets had double-digit premiums and 17 cities had premiums that were 20% or higher.

Ratios above the historical average suggest that renting is better than buying a home in that market. The bigger the gap, the more that market favors renting, but it also represents the ripest areas for a correction in home prices, according to the researchers.

“In markets with these high ratios, it is reasonable to expect price corrections because renting is much more favorable there,” Ken H. Johnson, an FAU economist, said in a statement. “Renting will slow down demand for homeownership, which will, in turn, affect prices.”

Stamford, Connecticut, had the lowest premium in the home price-to-rent ratio at 4.52% out of the 100 markets, while Spokane had the highest at 32.08%, which was an increase from 30.88% the previous month.

Spokane’s ratio had been dropping from its peak in March of 34.52%. Its annual rent growth is at about 3.8% now, dropping from a peak of 16% in the second quarter last year, according to CoStar data.

The median sales price of homes sold in the Spokane area was up 8.9% in August from the same month last year but has been falling on a monthly basis since May, according to residential real estate firm Redfin.

Meanwhile, Austin’s 29.62% premium in the home price-to-rent ratio marked another monthly decline from its April peak of 35.96%, suggesting average home prices are dropping in the Texas capital and narrowing the gap with rent growth. CoStar data shows Austin's annual rent growth at about 6.9% currently, 12.5 percentage points lower than the peak period in 2021’s final months.

The rest of the academic index's top 10 markets have been some of the strongest apartment rental markets in the country. Florida areas didn’t show as strong of a premium as many cities because of rent growth that has been higher than much of the country.

Miami tops the country on a different index the universities do with researchers from the University of Alabama for the most overvalued rental market. But the Miami area is at 9.18% in the home price-to-rent index, placing No. 83 out of the 100 areas.

“The recent spike in metro Miami rents has helped keep the price-to-rent ratio in the area relatively near its average,” said William Hardin, a dean at FIU’s College of Business, in the statement. “But it will be the production and delivery of new homes and apartments that will ultimately drive long-term housing affordability in the area.”