Record low mortgage rates, discounted home prices and rising rents are making home buying extremely attractive in most US cities. More and more data released by several research are pointing towards buying making more financial sense than renting. According to RentJungle, rents have climbed 20% over the past 3 years. On the other hand, home prices have fallen 45% in five years.
In a recent announcement, real estate valuation and listing site Zillow reported that in 75% of the 200 metro areas, homeowners would reach a “break-even point” in 3 years or less. In all the metro areas in Florida and in Las Vegas, NV it would take less than 2 years to break even. In some cities of California as well, the break even point is much less than 5 years ago:
- Los Angeles – 4.3 Years
- Riverside – 2 Years
- San Diego – 3.6 Years
- Sacramento – 3.1 Years
However cities like San Jose and San Francisco continue to be expensive and would take much longer to break even. San Francisco is at 5.9 years and San Jose (the highest in the list) at 8.3 years. Of course the study doesn’t take into account the fact that most parts of San Francisco Bay Area was less impacted by the housing downturn and is now witnessing one of the biggest upswings in prices this year. So while on Renting vs Buying these 2 cities may not quite match their counterparts across the country, in terms of emotional and investment value of owning a home – they rank right up there. In fact earlier this year San Jose was ranked as 1 of the top 5 cities for real estate recovery and 1 of the best markets for buying real estate.