Buying vs. renting: When buying a house makes more sense than paying monthly rent

Impact 5 report

BOYNTON BEACH, Fla. - Third grade teacher Angela McCray is adding up the money she'll save as a new homeowner.

"I was definitely surprised it would be cheaper to buy a home right now than to rent," McCray said.

Her house hunt brought her to Boynton Beach. She's ready to start paying into a mortgage.

Her agent, Yvonne Westerman of Realty Professionals, specializes in working with first-time buyers.

"This is a great time to buy, interest rates are at an all-time low and rents are going up," Westerman said.

New numbers out from real estate research website Zillow.com are helping back that notion up.

Its new "Breakeven Horizon" shows how many years you would have to own a home before it's better than just renting it.

In spots around West Palm Beach it averages out to 1.6 years. It's 1.7 years along the Treasure Coast.

But not so fast says George Stamas, a finance professor at Northwood University .

"Even with the rental market as strong as it is, meaning rental rates are as high as they are, it still makes a lot of sense for people to consider renting," Stamas said.

He gave three reasons: flexibility, the costs of home ownership, including taxes, maintenance and insurance, as well as future prices.

"For the housing market to make sense for a financial point of view, to get a return of investment on your down payment, the rate of increase of the home has to be greater than the rate of inflation over time," Stamas said.

For a closer look at Zillow's "Breakeven Horizon" click here . bit.ly/OHbbtG

 

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