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A recent study by Fannie Mae showed that 85 per cent of Americans think owning a home makes more sense in the long-term than renting.Zillow has come out with a new metric called the breakeven horizon to help prospective home buyers determine whether it makes sense to buy or rent in a specific metro.
The breakeven horizon refers to the number of years after which buying a home is more “financially advantageous” than renting one. The shorter the breakeven the horizon, the more it makes sense to buy.
Unlike the price-to-rent ratio this metric includes a whole range of possible costs including mortgage payments, property taxes, utilities costs etc.
We drew on Zillow’s report to put together a list of the 7 metros where it makes most sense to buy a home and included the price-to-rent ratio, median listing price, and median rent price.
Note: The list is drawn for the 30 largest metro areas. Median list and rent price are for June 2012.
This story was originally published by Zillow.The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.