Those who are moving somewhere for one year should rent. Those looking to stay for two years? Buy.
Zillow reports that its national Breakeven Horizon, the length in time in which renting makes more financial sense than buying, is down to 1.8 years as of the second quarter.
The Breakeven Horizon varies by market. In San Jose, where the typical home costs nearly $1 million and the median rent is $3,600 a month, renting makes more sense than owning if a person wants to live in a home for 4.9 years or less. The city’s breakeven point is up 1.25 years since Q2 2016.
Oklahoma City also had a large breakeven point increase, rising to 2.7 years. In OKC, the median rent is $1,195 and the median home value is $140,490.
Metros that saw the biggest annual declines in their Breakeven Horizons were San Diego, with a drop of almost eight months to 2.8 years, and New York, with a decrease of a little more than six months to 2.1 years.
Zillow has an interactive map that shows Breakeven Horizons for hundreds of markets across the country.
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