While most of us dream of owning a place some day, the reality of home prices in New York City sometimes make the prospect of homeownership look more distant by the month. It’s enough to stop us from even sitting down to crunch the numbers.
In case you’re curious though, it would take 5.08 years for a new homebuyer to break even on a housing purchase in Bushwick if they bought a place that was comparable to the one they would rent anyway, says a new report on StreetEasy.
The number is usually referred to as the tipping point, which is described as the amount of time it takes for buying “to become more financially beneficial than renting.” And citywide, that tipping point is 5.6 years. There are pockets of New York City that have huge tipping points, such as 30 years in Flushing and Soho.
Overall, the tipping point has gone up throughout the city since the last time the website crunched the numbers in three quarters of NYC’s neighborhoods. And it’s way higher than the nationwide average of just over two years as reported by Zillow.
StreetEasy’s Senior Economist Grant Long says, “Affordability remains a challenge for New Yorkers, but for those who have saved up for a down payment, our data shows that in some neighborhoods buying can quickly become more financially attractive than renting.”
The challenge, of course, is finding a place first and then scrounging up the 20 percent you’d need to afford a down payment. For a $600,000 apartment in Bushwick, that down payment would equal $120,000.
Now, what are our chances of winning the lottery?