Buying beats renting in 75 percent of top 200 metro areas in U.S.
By John Kirchner
August 3, 2012
A new survey from real estate listing website Zillow suggests buying is now a better option than renting for owners content with staying in one place for just a few years.
According to a new survey — Zillow’s first of this nature — in 75 percent of the top 200 metro areas in the country, the “breakeven point” is now less than three years. (The “breakeven point” indicates when it’s more financially sensible to own a home than renting it.)
Several factors are in play. Thanks to near-record low mortgage rents, owning a home has become extremely affordable for prospective buyers who were once priced out. But just as influential in the survey is the rising cost of rent, which, according to Zillow chief economist Stan Humphries, has risen as much as 5 percent nationally.
The numbers are difficult to ignore. Cities like Miami (1.6 years), Tampa (1.6), Detroit (1.7), Las Vegas (1.7) and Phoenix (1.7) have remarkably low “breakeven points.”
Contractors should be poised to sell the benefits of buying compared to renting, especially in markets where the writing is on the wall.
(To see more, check out this article from CNN Money.)