Read this before buying or renting your next home in New York
If you've been living in New York City for a while, you probably don't need us to tell you that a rent payment here could easily cover mortgage and a few utilities in other parts of the country. And while the thought of homeownership for New Yorkers that aren't millionaires is not impossible, it's far from easy.
Back in March, Bloomberg released an interactive map that analyzed neighborhoods in Brooklyn and Manhattan where buying versus renting (and vice-versa) was more logical. StreetEasy has broadened the scope with a map of their own that dives further in depth on the tipping points for 85 neighborhoods throughout Manhattan, Brooklyn, Queens, and the Bronx.
The average tipping point where rent would exceed the cost of buying a home in New York City is 5.6 years— up from 2016's average of just 4.9 years. The increase in the amount of time it takes to break even can be attributed to both rising mortgage rates and a softening rental market.
To no one's surprise, Manhattan has the longest tipping point at 7.7 years, followed by Brooklyn at 4.9 percent. Queens and the Bronx had the lowest tipping point at 2.7 and 1.4 years, respectively, however, several neighborhoods within those two boroughs are far from being prime for investment. For instance, in Flushing it takes a staggering 30 years before renting exceeds the cost of owning and Long Island City is only slightly better at 27.6 years.
"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," stated StreetEasy Senior Economist Grant Long.
Some of the best neighborhoods where buying pays off in less than two years include Canarsie, Northeast Flatbush, Kew Gardens, Briarwood, Parkchester, and Riverdale.
So there you have it. If you're one to move around a lot, maybe renting is your best option but if you're looking to stay put for a while, it might be good to see if buying is wiser in your neighborhood. StreetEasy has created a handy tipping point calculator that lets you play around with the numbers to assist in your decision making.
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