With home prices rising 6.6 percent year-over-year, it seems that renting would be the way to go, especially for residents of high-priced cities on the West Coast and East Coast. But SmartAsset’s latest Rent vs. Buy Calculator shows that’s not always so.
Before deciding to become a homeowner, SmartAsset says potential buyers need to consider how long they plan to stay in their current city, their current financial situation, the overall cost of renting (rent, application fees, security deposits, etc.), the overall cost of homeownership (down payment, closing costs, loan charges, cost of maintaining the home) and benefits of renting (flexibility) and owning (tax deductions, building equity).
“So, if renting is better in the short-run and buying is better in the long-run, when does the financial logic switch?” says the report. “When, in other words, do the long-run costs of renting begin to outweigh the upfront costs of buying?”
Nationally, the average time it takes for buying to beat renting (also known as the breakeven horizon) is 2.6 years, but the time could be more or less depending on the specific market a potential buyer lives in.
For a household in Atlanta making $100,000 a year with a