Buying a home can beat renting in less than a year

It doesn't take long for South Florida homeowners to see the value in buying over renting, a new report shows.

In Palm Beach, Broward and Miami-Dade counties, buying a home beats renting it after just 1.2 years, according to a first quarter analysis by a real estate website. At the same time in 2013, buying was better than renting in South Florida after two years.

The “break-even” point is less than a year in some local communities, including Lake Worth (six months), Margate (seven) and Coconut Creek (eight). For a full list, click here.

Among the 35 largest metro areas nationwide tracked by Zillow, the tri-county South Florida region had the fourth-shortest break-even point, after Riverside, Calif., (less than a year), Orlando (one year) and Tampa (1.1 years).

To realize the advantage in buying, homeowners have to stay put the longest in Washington, D.C., (4.2 years), Boston (four) and Phoenix (3.3).

Traditionally, owners have had to stay in their homes for five to seven years before buying beats renting, Zillow said.

“Rents keep rising, and mortgage interest rates remain very low, which is helping to skew the rent vs. buy decision toward buying for those who can afford it,” Zillow chief economist Stan Humphries said in a statement. “Many renters may ask themselves why renew a lease, when you can break even on the same home in less time in many areas.”

But Humphries points out that renting remains a “far less frustrating option for many people” who don’t have the money saved for a down payment or who want to remain mobile for job opportunities.

Seattle-based Zillow said it factored in all possible costs for buying and renting (up-front payments, closing costs, estimated monthly rent, mortgage payments, insurance, taxes, utilities and maintenance costs). The firm then used historic and expected home value appreciation rates to determine how long it would take before buying becomes a cheaper option than renting.