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Reminds me of a Harvard Daily Stat from 2012, inspired by Zillow data, which comes to a different conclusion. The Zillow data was based on a larger sample size

by cVwEq 8y ago

Reminds me of a Harvard Daily Stat from 2012, inspired by Zillow data, which comes to a different conclusion. The Zillow data was based on a larger sample size as compared to the article above, which I felt was too qualitative. The Daily Stat: After Just a Few Years, Home Ownership Beats Renting[1] In three-quarters of American towns and cities, it takes 3 years or less for a homebuyer to begin seeing savings over the cost of renting, according to a CNN report on data from Zillow[2]. Factoring in such costs as mortgages, rents, down payments, commissions, taxes, and maintenance, Zillow calculates that the "breakeven horizon" is as low as two years in some areas. But in New York City, which has some of the nation's highest rents, it still takes more than a decade before ownership makes more financial sense than renting. [1] Harvard Daily Stat, 9/12/2012 [2] http://money.cnn.com/gallery/real_estate/2012/09/06/buy-rent-cities/ http://money.cnn.com/gallery/real_estate/2012/09/06/buy-rent...

nostrademons 8y ago
I'd be curious how that stat changes if weighted by population rather than municipality. The article acknowledges that the calculus is vastly different for major metropolitan areas like SF or NYC. Thing is - a good portion of the population lives in those major metropolitan areas. It doesn't do much good to know that buying beats renting in, say, Kansas or Tennessee if you happen to live in SF or NYC. Similarly, I wonder how they'd compare either strategy to the "Move to SF or NYC for 10 years, make bank, live cheaply, then buy 5 houses in Kansas or Tennessee, living in one and renting the rest out. Never work again."
somethingsimple 8y ago
I resisted buying for years, but last year my wife convinced me we should buy a condo and I don’t regret it. We bought a unit with the same square footage as the place we rented, in a better location, and mortgage + property taxes + insurance is less than what we paid in rent, and that rent was only going to continue increasing every year. With a mortgage we fixed our biggest monthly expense.
tempuser24 8y ago
I think the article did touch on that, and honestly it was a whole big deal just to say "it depends on your situation" and in the associated costs section included break even costs, which I don't think is a good measure.

by cVwEq 8y ago

nostrademons 8y ago

I'd be curious how that stat changes if weighted by population rather than municipality. The article acknowledges that the calculus is vastly different for major metropolitan areas like SF or NYC. Thing is - a good portion of the population lives in those major metropolitan areas. It doesn't do much good to know that buying beats renting in, say, Kansas or Tennessee if you happen to live in SF or NYC. Similarly, I wonder how they'd compare either strategy to the "Move to SF or NYC for 10 years, make bank, live cheaply, then buy 5 houses in Kansas or Tennessee, living in one and renting the rest out. Never work again."

somethingsimple 8y ago

I resisted buying for years, but last year my wife convinced me we should buy a condo and I don’t regret it. We bought a unit with the same square footage as the place we rented, in a better location, and mortgage + property taxes + insurance is less than what we paid in rent, and that rent was only going to continue increasing every year. With a mortgage we fixed our biggest monthly expense.

tempuser24 8y ago

I think the article did touch on that, and honestly it was a whole big deal just to say "it depends on your situation" and in the associated costs section included break even costs, which I don't think is a good measure.