Buying a home in Houston is a great deal – so long as the owner stays in it for almost two years.
That was the conclusion of Zillow’s latest Breakeven Horizon report, which calculates how long the average homeowner has to stay in a home before it makes more financial sense than renting.
Nationwide, the breakeven horizon in 2016 was 1 year and 11 months. According to the report, that’s a 20-day increase from 2015, and the result of a widespread slowdown in home price appreciation.
Buying in Houston is about the same – a person needs to own his or her home for one year and 11 months before it makes more financial sense than renting (assuming the home appreciates 2.97 percent in the first year). While that’s a high breakeven horizon for Texas – the second highest in the state behind Austin, in fact – it’s lower than most other major metropolitan markets.
| City | Median Breakeven Horizon (in years) | Annual Change in Breakeven Horizon (in years) |
|---|---|---|
| Atlanta | 1.4 | 0.02 |
| Boston | 2.6 | -0.47 |
| Chicago | 2 | -0.09 |
| Denver | 2.2 | 0.52 |
| Los Angeles | 4.1 | 0.03 |
| Miami | 2.2 | -0.27 |
| New York | 2.5 | -0.65 |
| Phoenix | 2.4 | 0.11 |
| San Francisco | 4.4 | 1.53 |
| Washington, D.C. | 3.5 | -0.97 |
Since 2015, Houston’s breakeven horizon has increased by almost five months. That’s the seventh biggest increase in the nation, and an accurate reflection of how significant the market’s slowdown has been in recent years.