Many Millennials have been putting off buying their first home in favor of renting. It seems like a more financially sustainable option: cheaper, more flexible, less responsibility right? Actually wrong. New data from mortgage and housing firm Zillow suggests that soaring rents are now making owning your own home a pay off. The data shows that a first time home buyer with median income spends just 15.3% of income on home payments, while renters are spending around 29.9%. That 14.6% difference is a fairly striking margin. From 1985- 1999 home owners only took home only 2.8% more of their income than renters. So should you take a second look at buying your own place? Now is definitely a good time if you're able to scrape together a down payment. Unfortunately high rents make first time buying harder, but low mortgage rates and below peak prices can definitely offer a helping hand. Keep in mind that buying only makes sense if you expect to live there for 4 or 5 years, allowing time for your home to appreciate in value of around 3% per year to offset other additional buying costs. Only 3 markets show owning to be more expensive than renting, San Jose, Los Angeles and San Diego. But in cities like Tampa, Houston and Pittsburgh, around a 15 percentage point gap favors owning. So maybe it's time to start climbing that property ladder.
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