I wish I had been tracking this particular data point over the last few years.
With average home prices in Savannah and in many other cities down pretty dramatically from their peaks, buying a home is looking better and better.
Zillow has come up with the “breakeven horizon” for 257 metro areas. That’s the point at which purchasing a home is more economical than renting an equivalent property. The calculations assume 30 year mortgages and average upfront costs of buying a home.
Here in Savannah, the breakeven horizon is down to 2.7 years.
Below are the breakeven horizons by metro and cities within metros for Q3 2012. 152 out of 257 metros (or 59%) have a breakeven horizon of less than three years. Among the 30 largest metros, New York metro has the longest breakeven horizon at close to 5 years, making it a better place to rent for many people. Detroit has a breakeven horizon of 1.7 years, the lowest horizon among the top 30 metros. Therefore, buying in Detroit ends up being more advantageous than renting for many consumers. Search within your metro to find your city’s breakeven number.