Home prices in the Sacramento region keep dropping, but rents are creeping up.

The result: In many neighborhoods, it doesn't cost much more to own a house than to rent an apartment, and often it costs less.

These shifting economics pushed Brent Pierce, 35, to buy his first house last August. Pierce, an analyst with Franklin Templeton Investments in Rancho Cordova, paid $185,000 for a Citrus Heights house that was bigger than his old apartment – plus it had a yard and a hot tub.

His $1,300 monthly mortgage payment is just $100 more than he paid in rent.

"That's the big reason I decided to buy," he said.

Jeff Werolin, manager of Lyon Real Estate's Folsom office, said the price gap between renting and owning in the Sacramento region is the narrowest since the early 2000s – when the local market began its big run-up.

That's not going to make much difference to the thousands of Sacramentans who have lost jobs, seen their incomes drop or don't have the credit to get a loan. But for those who do have steady employment and money for a down payment, now may be the time to make the move from renting to owning.

"In anything priced under $250,000, a buyer is going to pay less in mortgage payments than renting," said John Arvanitis, president of Sunrise Vista Mortgage Corp. in Citrus Heights.

"I've never seen a market like this."

The median price for a single-family home in the city of Sacramento was $132,000 in the second quarter of 2011, a 13 percent decline from the year-earlier period, according to figures provided by San Diego-based DataQuick.

For a house at that price, a typical buyer will pay about $949 a month, including taxes and insurance, for a 30-year FHA loan with a fixed 4.5 percent interest rate.

By contrast, the average apartment rent in Sacramento for the second quarter was $885, a 0.8 percent increase from the same period in 2010.

Once the tax write-off for mortgage interest is factored in, the price of owning the median-priced home in Sacramento is often lower than the price of renting the average apartment.

Other neighborhoods have seen a similar narrowing of the rent-vs.-own price gap.

In Elk Grove, where the median home price was $208,000 during the second quarter of 2011, a typical first-time buyer would have paid about $1,500 a month.

The average rent in Elk Grove during the same period was $1,100, according to RealFacts.

Even for higher-priced homes, the rent-vs.-own economics are increasingly favoring buyers.

Three weeks ago, Intel Corp. engineer Laurent Lazard, 34, bought his first house, a four-bedroom, three-bathroom model in Folsom. He paid $355,000, and his mortgage payment, taxes and insurance will total about $1,700 a month.

Laurent, who made a 20 percent down payment, said he previously paid $1,550 a month to rent a three-bedroom house.

"I'd been sitting on the sidelines for maybe 10 years, but if you do the math, it makes sense (to buy), especially if you're going to stay in your home for five to 10 years," he said.

The disconnect between sales and rental prices is an unanticipated outgrowth of the housing market crash.

Rents and home prices often move in lockstep: Higher real estate prices usually lead to rent increases. When prices fall, rents typically drop.

But since 2007, roughly 67,500 homeowners – or 8.5 percent of the households in the four-county Sacramento region – have lost their homes through foreclosure.

Many of these former homeowners have gone into the rental market, driving up occupancies and average rents, real estate experts said.

According to RealFacts, the vacancy rate for Sacramento is a relatively healthy 6.3 percent, while vacancies in places like Roseville, Citrus Heights and Folsom are even lower.

Craig Powell, whose company Powell Properties LP owns several upscale apartment complexes, believes the rental market hit bottom about a year ago and is beginning to move up.

Powell said he recently raised the rents at one of his rental projects in Curtis Park after having to reduce them four times since 2007.

The newly renovated one-bedroom and studio units, with free WiFi and free heating, used to rent for $1,295 four years ago. Last year they went for $995. Powell recently increased rents to $1,095.

"We're not close to being out of the woods, but it's a little bit better," he said.

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