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To rent or buy? Zillow says breakeven horizon in region is 2.8 years

Number crunchers at real estate giant Zillow calculate the breakeven horizon as the point at which owning a home becomes more financially advantageous than renting one over the same time period. The national breakeven horizon is 1.9 years. In other words, it will take less than two years for buyers in 70 percent of the housing markets nationally to break even compared to renting the same home.

In Philadelphia proper, that figure is 1.8 years, but in the metro region, the breakeven horizon is 2.8 years. Last year, that number was 2.4 for the Philly metro region. Nationally, the city with the longest wait for reaching the break-even point is Washington, D.C. (at a grueling 4.5 years). The city with the shortest wait was Dallas.

According to Zillow, rents are expected to stabilize nationwide through 2016, meaning the breakeven horizon could lengthen as home values increase. Interestingly, they note that condos have a longer breakeven wait because of their association fees.

None of that is particularly good news for millennials, whom Zillow cites are likelier to live in urban areas with longer horizons and are likelier to make their first purchase a condo.

Read the full analysis, here >>

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