Renting vs. Buying, the Breakeven
Have you ever wondered at what point it makes more sense for you to stop renting and to buy? Zillow has compiled Breakeven Horizons for the nation’s major housing markets. Chicago’s breakeven is in the middle of the nation’s highest, 4.5 years in D.C. and lowest, 1.3 years in Dallas. In Chicago, you would need to live in a home 2.1 years before owning a home becomes financially smarter than renting an apartment.
‘A persistent combination of healthy home value growth and low mortgage interest rates, combined with robust growth in rents, is helping to keep the buy vs. rent equation tilted heavily towards buying in most areas for those planning on staying in their homes for longer than just a few years. But local markets vary, and that equation is shifting – if even slightly – in some notable areas.’
‘To calculate the Breakeven Horizon, we make some basic assumptions and bake in common costs associated with renting and buying, including down payments, security deposits, taxes and fees. The result is a comprehensive look at how long you’ll need to stay in a home in a given area before the total costs of renting, offset by investments in stocks or bonds, surpass the costs of owning as equity builds.’
See the full article here – http://www.zillow.com/research/q4-2015-breakeven-horizon-11726/