San Antonio, Texas is the sweet spot for homeownership, according to Zillow’s latest analysis. San Antonio is a market with strong income growth, a growing job market, and a place where you can break even on a home purchase in just over a year.
The Zillow® Breakeven Horizon, released quarterly, looks at how long home buyers need to stay in a home before buying it makes more financial sense than renting it. The national Breakeven Horizon is less than two years, and owning is more affordable than renting in 34 of the 35 largest metros. But it’s still difficult to afford a down payment, especially as rents continue to rise across the country. Zillow combined the Breakeven Horizon with job market and income information to find places where homeownership is not just financially advantageous but also more likely to be financially possible.
In San Antonio, homeowners can expect to break even on a home purchase in one year and four months. Incomes have appreciated an average of 4 percent over the past year and employment growth has hit almost 3 percent, both more than the national average, making San Antonio a sweet spot for homeownership.
Long Breakeven Horizons are pushing Silicon Valley hot-spots down the list, despite relatively strong labor markets. In San Jose, homeowners need to stay in their home for more than three years to make buying it more financially advantageous than renting it. San Jose would move up 20 spots on the list if the Breakeven Horizon were the same as Seattle, at under two years.
“All places on this list are great for those looking to buy a home and settle down,” says Zillow Chief Economist Dr.Svenja Gudell. “Not only do they have a strong labor market, but a home purchase in these markets makes a lot of financial sense. Be careful, though, because this assumes you can qualify for a mortgage, have a down-payment saved up and, most importantly, can find a home for sale in your price range. Simply put, buying a home in many of these markets is not for the faint of heart.”
The labor market is looking especially strong in Raleigh and Columbus — employment is up about 4 percent inRaleigh. In Columbus, incomes are appreciating just over 6 percent, more than double that of the nation, where incomes have appreciated about 2 percent over the past year.
For more information and full details on the report, visit the Breakeven Report on Zillow.