The best and worst places to rent in the U.S.

Rent increases showed us which cities' rental markets were tightening, a bad sign for tenants. In San Francisco — No. 22 on our list — monthly rents rose an average 8.6 percent to $1,904 a month, claiming the highest year-over-year increase in the country.

Construction rates indicate what price hikes would be like in 2008 and beyond. In Chicago, which ranked No. 10, construction rates this year are up 400 percent, which means that in the next few years, there should be more space to rent, which should also mean fees will remain affordable.

The percent difference between the average monthly rental payment and the average monthly mortgage payment helped us determine where it is cheaper to rent and where it is cheaper to buy. In No. 40 Cleveland, for example, it's actually cheaper to buy than rent. Here, the average rent is $702 a month, while the average mortgage payment is only $566. In Las Vegas, No. 19, those figures are inverted. Renters there pay just $836 per month compared to $1,372 for a monthly mortgage payment.

It's no surprise that four Florida cities showed up in our top ten. Kermit Baker, a senior research fellow at the Harvard Joint Center for Housing Studies, says that Orlando, Miami, Jacksonville and Tampa have been overbuilt. Since nobody is buying, developers are renting out the condos in order to make a return on their investment.

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"Those are going to be the markets that are pretty advantageous for renters," says Baker. He also says that until the market stabilizes a bit, it's better to keep on renting.

In all of our top ten cities, rent is infinitely cheaper than paying down a mortgage. In Portland, Ore., for example, it costs $772 a month to rent a home, compared to $1,588 for a monthly mortgage payment. Even if you've got the money for a down payment, those monthly bills add up.

However, if you're set on buying a home, Bernard Markstein, senior economist and director of forecasting at the National Association of Homebuilders — a Washington, D.C.-based trade organization — still believes it's a good time, if you're ready. The sorts of deals on the market right now — extra amenities and reductions on closing costs — are eventually going to dissipate. The key is to only buy if you plan on spending at least seven years in the home. That's how long it takes for most buyers to see a return, or to at least break even. If you're looking to make a quick buck, now is not the time.

"The American Dream is still there," says Markstein, "but buying is not the right situation for every person at every time in their lives."

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