Home prices might be rising and outpacing wage growth in some coastal markets, but don’t let that get you down if you’re in San Antonio.
With high income and employment growth and a short breakeven horizon — the time it takes for buying to become more affordable than renting — San Antonio is the “sweet spot” for homeownership, according to a recent Zillow report.
The Zillow Breakeven Horizon for the nation fell by three months in the first quarter of 2016, hitting one year and 10 months. Owning is now more affordable in 34 out of 35 of the largest U.S. metros. But for San Antonio, the breakeven horizon is just one year and four months — one of the fastest times across all metros.
Dallas and Indianapolis are two cities with shorter breakeven horizons, but Dallas dropped in income by 5.5 percent and Indianapolis dropped by 0.3 percent, taking them out of the top 10 best cities to buy.
Other top cities for buyers according to Zillow include Nashville, Tampa Bay, Jacksonville, Raleigh, Charlotte, Columbus, Atlanta, Seattle and Memphis.
What buyers can expect in San Antonio
San Antonio incomes have appreciated an average of 4 percent over the past year. Employment also hit a stride, growing just under 3 percent over the past year.
With a median home value estimation of $151,500, buying in San Antonio is relatively affordable. Rents are competitively priced at a median of $1,311 per month, but it’s still a better bargain to own than to continue renting after a year and change.
Home values are forecasted to rise 4.3 percent year-over-year Zillow says, creating solid opportunity for returns on investment. Meanwhile, rents are expected to rise 2.4 percent over the next year, which means money down the drain that could otherwise bring profit in the long run.
Buying in Texas
While Houston has a solid breakeven time at one year and five months, dips in citywide income and minor employment growth pushed it out of the top 10 list.
Zillow reports Houston’s median home value at $173,300 but expects it to rise 3.4 percent over the next year. The median rental value is expected to push higher, at 3.7 percent year-over-year. Its current median price is $1,586 per month.
Austin’s employment rates are skyrocketing at 4.4 percent annually, but a 2.1 percent drop in wages pushed the hotspot toward the bottom of the best cities to buy list. The breakeven horizon in Austin (around two years) pales in comparison to the quick breakeven times of San Antonio, Nashville and beyond.
The median home value in Austin is $250,400 with a forecasted 4.3 percent increase over the next year, according to Zillow. The metro’s median rental value of $1,704 per month is expected to rise another 2.8 percent annually.
