Nationally, it takes less than two years for buying a home to be a better decision than renting it, according to Zillow's Q4 2015 Breakeven Horizon. This is in part due to rents climbing quickly, while interest rates remain near historic lows.
For potential home buyers in Washington, D.C., Los Angeles, New York and Boston, though, it takes more than three years for it to be a better financial decision to buy a home instead of renting it. For young workers, who typically stay at one job for three years, it may make sense to rent in these markets, even if their monthly mortgage payments would be more affordable than the rent.
Because of condo association fees, it takes even longer to break even on a condo, which is a common choice for young home buyers.
Among the 35 largest metros, it takes longest to break even in Washington, D.C., at 4.5 years. Dallas and Indianapolis can break even quickest, in just 1.3 years. In general, it will take longest along the West Coast and the Northeast Corridor, while the Midwest and Southwest can do so faster.
Looking ahead, the Breakeven Horizon could lengthen, as rents are expected to flatten across the country, and home values are predicted to rise at a faster pace in 2016.
These are the metros where it will take the longest to break even on a home:
- Washington, D.C. – 4.5 years
- Los Angeles – 4.1 years
- San Diego – 3.4 years
- San Jose – 3.2 years
- New York/Northern New Jersey and Boston – 3.1 years
via Zillow Porchlight | Real Estate News, Advice and Inspiration http://ift.tt/1R7DAIU
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