It takes less than three years to break even on a home purchase in Philadelphia, making buying more financially attractive compared to renting in this city, according to a new report.
Real estate website Zillow recently released findings that looked at the "Breakeven Horizon" for the 100 largest markets in the U.S. based on quarter 1 real estate market numbers. The breakeven horizon is an estimate of how many years it would take to live in a home before buying it would make more financial sense than renting.
In Philadelphia, it would take 2.5 years to break even on a home purchase. That’s about one year longer than the nationwide breakeven horizon, which is about 1.7 years.
Now, the breakeven horizon number is based on Zillow's estimates of median home values and rents in Philadelphia, which they put at $200,131. For median rent, they say it's $1,650 a month.
Still, two-and-a-half years doesn’t sound too terrible, especially when you look at nearby cities like Washington, DC, where it would take 3 years and 7 months to break even—one of the longest time periods in the country.
Interestingly, a closer look at Philly’s surrounding real estate markets reveals similar stats on par with DC. In Lancaster, for example, Zillow estimates it will take 3.4 years to break even. Other areas, like Reading and Allentown, are more on par with Philly’s 2.5 years.
- It costs $16 a day to buy a home in Philly [Curbed Philly]