Buying a home versuys renting pays off after three years on average

For renters, buying a home pays off after three years on average -

Real estate website Zillow says the 'break-even horizon' for potential home buyers varies widely depending on location.  By Alejandro Lazo, Los Angeles Times August 2, 2012, 5:00 a.m.

• Real estate website Zillow has a provocative data point for every renter thinking about buying these days: That move pays off after just three years on average nationwide.

  The company, which lists for-sale and for-rent information on its site, has released a new analysis of what it calls the "break-even horizon," comparing what it would cost to buy or rent the same home in a number of U.S. markets over time.

  The rent-or-buy calculus varies widely depending on where you live.

  In the combined Los Angeles and Orange counties, the magic number is 4.3 years, assuming the buyer has made a 20% down payment. Buying wins out after only 1.6 year in the desert community of Banning. But Newport Beach residents must wait 14 years for buying to make more financial sense than renting.

  The analysis takes into account a host of factors potential buyers should think about when considering the leap, including the down payment, mortgage and rental payments, buying and selling costs, property taxes, utilities, maintenance costs and tax deductions. The analysis adjusts for inflation and forecasts home value and rental price appreciation.

  Zillow senior economist Svenja Gudell said the data should help homeowners get a rough and immediate sense of whether buying makes sense in a particular area in relation to their financial situation.

  "For a home buyer out there, it is really tough to get a good grip on the buy-versus-rent decision," Gudell said. Although buying a home is a deeply personal decision, she said, the analysis gives consumers "a sense for 'Am I ready to make this decision?'"

• For more click here: http://www.latimes.com/business/realestate/la-fi-rent-or-own-20120802,0,61144...

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