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Posted in: Buying a home, Getting a mortgage, First time homebuyer tips

Buying beats renting after 2.6 years in Twin Cities

Buying beats renting Twin Cities

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.

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Status Definitions

For Sale: Properties which are available for showings and purchase

Active Contingent: Properties which are available for showing but are under contract with another buyer

Pending: Properties which are under contract with a buyer and are no longer available for showings

Sold: Properties on which the sale has closed.

Contingent and Pending statuses may not be available for all listings