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Here Are 7 Housing Markets Where It Makes Way More Sense To Buy Than Rent

August 12, 2012   ·   0 Comments

A recent study by Fannie Mae showed that 85 percent of Americans think owning a home makes more sense in the long-term than renting.

Zillow has come out with a new metric called the breakeven horizon to help prospective home buyers determine whether it makes sense to buy or rent in a specific metro.

The breakeven horizon refers to the number of years after which buying a home is more “financially advantageous” than renting one. The shorter the breakeven the horizon, the more it makes sense to buy.

Unlike the price-to-rent ratio this metric includes a whole range of possible costs including mortgage payments, property taxes, utilities costs etc.

We drew on Zillow’s report to put together a list of the 7 metros where it makes most sense to buy a home and included the price-to-rent ratio, median listing price, and median rent price.

Note: The list is drawn for the 30 largest metro areas. Median list and rent price are for June 2012.

Miami-Fort Lauderdale, Florida

Breakeven horizon:
1.6 years

Price-to-rent ratio:
7.6 percent

Median list price:
$230,000

Median rent price:
$1,600

Source: Zillow

Tampa, Florida

Breakeven horizon:
1.6 years

Price-to-rent ratio:
7.8 percent

Median list price:
$140,000

Median rent price:
$1,000

Source: Zillow

Detroit, Michigan

Breakeven horizon:
1.7 years

Price-to-rent ratio:
6.0 percent

Median list price:
$89,900

Median rent price:
$800

Source: Zillow

See the rest of the story at Business Insider

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By lisa

Tags: news