Feb. 11, 2016
The misconception many potential buyers have is the that it costs more to buy a home. While initially, it does take more money to buy a home (which requires down payment/closing costs) than a rental (which requires a security deposit) - If you examine the money spent it's often cheaper to own on a monthly basis with the after-tax savings of the write-offs and interest deductions. And now a recent study finds that you'll likely break even on the costs in less the 2 years.
On average, Americans can break even on a home purchase in less than two years in 70 percent of U.S. metros, thanks to low interest rates, healthy home value forecasts, and the relatively fast pace of rents in recent years, according to the analysis of the fourth quarter of 2015.
The analysis found that, generally, one does not need to live in a home for even two years to make purchasing the home more financially advantageous than renting it over the same time period.
Boston, one of the nation's youngest cities, has a break even point of just over three years. San Francisco's break even point is 2.9 years, up from 2.6 years in the fourth quarter of 2014. Both markets are attracting young people following jobs, and many of those remain renters despite record-high rental costs.
-California Association Of Realtors, C.A.R. Newsline