Rent or Buy? The Numbers Say: Buy!

Buying a home in Houston becomes more cost effective than renting after only one year and eleven months, according to a new report from Zillow. This calculation looks at factors such as current rents, interest rates, and anticipated changes in home value. In markets where values are rising rapidly, homeowners gain equity quickly as the value of their home increases. This quickly earned equity offsets any upfront expenses related to home purchase, like closing costs. While the “breakeven point” at which home ownership is cheaper than renting has increased since last year’s boom, Houston is still doing better than most of the country.

Buyers in very expensive cities see longer breakeven points because homes in these places are already so expensive that they appreciate more slowly. San Jose, CA has the longest breakeven horizon in the country, at 5 years 2 months. San Francisco, Los Angeles, and San Diego are also some of the places where it takes the longest to break even before buying is a financially savvy idea. Austin is the Texas city with the longest breakeven point, at 2 years, 5 months.

What does this mean for you? Even if you will be living in Houston for a relatively short period, purchasing a home is a good investment. Many temporary Houstonians find themselves in our fair city for only a few years at a time for work assignments before moving on to the next place, but rising rents and a strong housing market make purchasing a home a more attractive prospect.

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Source : Zillow