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Wednesday, August 8, 2012

Making the Rent vs. Buy Decision: Zillow Calculates the Breakeven Horizon

[Published 8/9/2012 in the Denver Post and in four Jefferson County weekly newspapers]


How does a renter determine when it is financially advantageous to buy? Last week, Zillow.com came out with a report detailing the “breakeven horizon” for different U.S. cities.

The breakeven horizon, according to Zillow, is the number of years you need to own and live in a home for it to become more financially advantageous than renting the same home. This varies from city to city, and Zillow made the analysis for thousands of cities in 224 different metro areas.

The range was from 1.6 to 8.3 years. Here are some of Zillow’s numbers for Jefferson County:
  • Lakewood—2.6 years
  • Arvada—2.6 years
  • Littleton—2.4 years
  • Golden—3.5 years
  • Wheat Ridge—2.7 years
  • Evergreen—3.5 years
  • Genesee—4.8 years
  • Morrison—3.0 years
Here's a link to the full Zillow analysis:
Is buying right for you? You’ll also need to consider how long you expect to stay put, your marital status (and whether it’s likely to change), your job situation, and, of course, your credit score and whether you can qualify for a mortgage. If you need a good mortgage person to advise you, give me a call and I’ll recommend one or two whom I think would be a good fit for your particular situation.

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