New analysis shows buying beats renting

by Meridith Doucette on August 2, 2012

According to a recently released analysis from Zillow, buying a home may be a much better option than renting if the individual is planning to live in a home for at least three years.

The market for new homes has improved over the past year and continues to show signs of improvement. The survey analyzed more than 200 metropolitan areas and 7,500 cities in the country to figure out how many years it would take for owning a home to become a better deal than renting the same residence.

“Across most of the country, historic levels of affordability make buying a home a better decision than ever, especially considering rents have risen more than 5 percent over the past year,” said Stan Humphries, Zillow chief economist. “This is the first analysis of metros and cities that presents the buy versus rent decision in an intuitive way, by telling consumers how long they must live in the home before buying breaks even with renting financially.”

Some metro areas that were analyzed saw home values fall drastically during the recession, which leads to some homeowners to break even after less than two year of owning a home, such as Miami-Ft. Lauderdale where homeowners could break even after 1.6 years.

With homes rising back to normal amounts, consumers are encouraged to research homes and make a purchase in order to take advantage of the low prices.

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