Buying a home in Miami is a great deal – so long as the owner stays in it for more than 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 Miami, however, a person needs to own his or her home for two years and a little over two months before it makes more financial sense than renting (assuming the home appreciates 1.73 percent in the first year). While that’s a relatively high breakeven horizon for Florida, it remains well below many 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, Miami’s breakeven horizon has decreased by 98 days, a reflection of both rising rental rates and strong home value increases.