Your Home is Your Castle…
It does not matter whether you rent or own- your home is your castle. Not only is your home where you create precious memories, but also, it provides much-needed protection. But how do you know whether renting a home or buying a home is best for you?
Knowing whether or not renting a home or buying a home is right for you is a vital decision to make. One thing is for sure- when buying a home- you don’t want to make a mistake and do it too soon, just as you don’t want to wait too long, either. There are so many important factors that come into play when buying a home. And thankfully, there’s something called “the breakeven horizon.” The breakeven horizon is a method used to determine the number of years after which purchasing a home is more financially advantageous than renting a home. To make the comparison as realistic as possible, the breakeven horizon incorporates simple math. The breakeven horizon takes the buy versus rent breakdown and incorporates all possible costs acquired for those purchasing a home as well as those when renting a home.
So what is the breakeven horizon number in your area? If you are thinking about buying a home- the breakeven horizon is a crucial consideration. Depending on where you live the breakeven horizon varies, but among some of the largest markets, Dallas is the shortest at a breakeven number of 1.3 years- while Washington, D.C. is the longest at 4.5 years. Take a look and see how your area fares, hopefully, this may help those thinking about buying a home make a good decision.
Metro Area |
Q4 2015 Breakeven Horizon (years) |
Q4 2014 Breakeven Horizon (years) |
Rent Index, Q4 2015 |
United States |
1.9 |
1.9 |
$1,381 |
Washington, D.C. |
4.5 |
4.2 |
$2,107 |
Los Angeles, CA |
4.1 |
5.1 |
$2,491 |
San Diego, CA |
3.4 |
3.8 |
$2,316 |
San Jose, CA |
3.2 |
2.7 |
$3,431 |
New York/ Northern New Jersey |
3.1 |
3.4 |
$2,384 |
Boston, MA |
3.1 |
3.4 |
$2,247 |
Baltimore, MD |
3.0 |
2.9 |
$1,714 |
San Francisco, CA |
2.9 |
2.6 |
$3,338 |
Philadelphia, PA |
2.8 |
2.4 |
$1,558 |
Miami, FL |
2.5 |
1.7 |
$1,822 |
Phoenix, AZ |
2.3 |
2.3 |
$1,249 |
Minneapolis, MN |
2.2 |
2.2 |
$1,500 |
Chicago, IL |
2.1 |
2.2 |
$1,633 |
Portland, OR |
2.1 |
2.0 |
$1,689 |
Sacramento, CA |
2.1 |
2.2 |
$1,599 |
Tampa, FL |
1.9 |
1.5 |
$1,296 |
Orlando, FL |
1.9 |
1.6 |
$1,343 |
Seattle, WA |
1.9 |
1.9 |
$1,931 |
Austin, TX |
1.9 |
2.1 |
$1,683 |
Riverside, CA |
1.8 |
1.5 |
$1,691 |
Pittsburgh, PA |
1.8 |
1.6 |
$1,090 |
Charlotte, NC |
1.7 |
2.0 |
$1,221 |
St. Louis, MO |
1.7 |
1.6 |
$1,123 |
Denver, CO |
1.7 |
1.6 |
$1,952 |
Las Vegas, NV |
1.7 |
1.5 |
$1,212 |
Columbus, OH |
1.7 |
2.0 |
$1,271 |
Cincinnati, OH |
1.6 |
1.7 |
$1,225 |
Cleveland, OH |
1.5 |
1.8 |
$1,124 |
San Antonio, TX |
1.5 |
1.6 |
$1,301 |
Kansas City, MO |
1.5 |
1.6 |
$1,199 |
Houston, TX |
1.5 |
1.5 |
$1,579 |
Atlanta, GA |
1.4 |
1.5 |
$1,274 |
Detroit, MI |
1.4 |
1.3 |
$1,132 |
Indianapolis, IN |
1.3 |
1.3 |
$1,181 |
Dallas, TX |
1.3 |
1.2 |
$1,500 |
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