Buying remained better than renting in certain situations, but members of the millennial generation continued to have reasons to rent instead of buy, according to Zillow.
Homebuyers in Boston, Washington and New York must stay in a home for at least three years, in order to break even on a home purchase, Zillow said in its quarterly Breakeven Horizon report, issued in a Thursday news release. Homebuyers in the San Francisco Bay Area also must stay in their homes for at least that long to break even.
However, in 70% of U.S. metro areas, homebuyers need to stay in a home for less than two years to break even on it. Low interest rates, forecasted increases in home values and the fast pace of rents contributed to the outcome, Zillow said.
Since millennials stay in one place for an average of three years, buying a home may not make sense for them in a financial equation, Zillow said. That's the case even if paying a monthly mortgage payment is more affordable.
"Even with record-high rents in job centers like San Jose, Boston and Washington, 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," Svenja Gudell, Zillow's chief economist, said in the release.
