A new study shows that in more than three-fourths of 200 metro areas in the U.S., home owners would â€œbreak evenâ€ financially by owning a home after three years or less than if they opted to rent instead.
The recent study by Zillow factors in home ownership costs -- including down payments, closing costs, mortgage payments, property taxes, utilities, and maintenance costs -- and compares it to the costs of renting. The study supports other recent findings that show with rents are on the rise nationwide that home ownership is becoming increasingly affordable with record low mortgage rates and falling home values.
"Historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year," says Stan Humphries, Zillowâ€™s chief economist.
Zillow found that even in some markets, such as Miami, a person buying a home would only have to stay in that home for about 1.6 years for it to prove better than renting one there, due to the rising costs of renting in the city. Tampa, Fla., and Memphis, Tenn., also were found to be some of the top cities where owning a home trumps renting by the most, according to Zillow.
Meanwhile, San Jose, Calif., home owners have the longest time until they reach a â€œbreak evenâ€ point on their homes. Home owners there would have to wait 8.3 years before their home purchase would trump renting, according to the Zillow study.
Source: â€œBuying Beats Renting in Most Cities,â€ CNNMoney (Aug. 2, 2012)