Is homeownership worth it?

Most people think that buying a home is an investment, and renting is seen as not fulfilling the “American dream”. However new research suggests that owning your own home may not be as financially wise as you may think, at least in some states.

Research done suggests that it will take approximately 3 years for homeowner to break even on their investment on a home. To “Break even” the cost of owning your home should be equal to the cost of renting, after you include down payments, interest, rising rents and home appreciation.

Research states that the years taken to break even varies from state to state. On average, in the US, home buyers can break even in 2 years with this figure lessening in states like Midwest, Southeast and New York to Boston. In states like Florida, Northern California and Virginia Beach, Virginia, and Philadelphia, this figure has further slowed down. In Washington DC, home buyers will need to wait 4 ½ years to break even while in Dallas only 1.3 years.

Chief economist at Zillow’s stated “Even with record-high rents in job centers like San Jose, Boston and Washington D.C., putting off a home purchase might be the best financial decision for a young person who has saved enough for a down payment, depending on how long they intend to stay in their jobs and homes,…Young workers face a lot of hurdles on the way to homeownership, including saving for a down payment in the first place and deciding where and when to settle down.”