Recent reports show that buying a home in Minneapolis-St. Paul is a better move financially when compared to renting — if the person stays in their purchased home for at least 2.6 years.
The "breaking even" point
This break-even point, at which point its better to buy than rent, was well below other metros surveyed. According to the report, in 64 percent of metros across the nation, buying was better than renting after an average of three years.
The data factored in all costs of buying and renting, including upfront payments, closing costs, anticipated monthly rent and mortgage payments, insurance, taxes, utilities and maintenance costs.
Current market conditions point to a buying advantage
"Locally high home value appreciation in many areas, combined with historically low mortgage rates and low home prices relative to recent peaks, has made buying a home a more advantageous financial decision than renting for many would-be buyers," said Zillow Chief Economist Stan Humphries. "The decision to buy or rent should always take into account a number of factors, one of which is how long a buyer or renter plans to stay in a property. Even in areas with relatively low breakeven horizons, buyers should resist the temptation to buy and sell properties based only on short-term goals."
While the Twin Cities as a whole had one of the shorter break-even points, depending on which ZIP code a homebuyer plans to move to, the point at which buying beats renting could be achieved in as little as 1.7 years. The affordability of homebuying is primarily due to near record-low rates for mortgages.
Thinking it's time to buy? Contact us today and we'll get you started on the homebuying process.