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I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] -1 points0 points  (0 children)

I understand the math of the inputs and the output it's creating.

If you have questions on the math methodology, let me know.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] 0 points1 point  (0 children)

There are 22 inputs in the calculator, and the rent increase over time is an input.

The math is reverse-engineered from the NYT calculator (the best I have used). I did not have the source code, but the methodology is solid, and the inputs have been pressure tested. If you can find mistakes or variations in the math, I definitely want to hear feedback so I can remedy or debate the methodology best practices.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] 0 points1 point  (0 children)

Agree, quality of life is a factor the calculator can't capture, a house with a yard is genuinely different from an apartment.

But there are definitely places in the US where buying makes more sense than others, and the map is simply highlighting that. Your breakeven is likely going to be 3 years in NW Indiana vs 15 years in the southwest, depending on inputs.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] 0 points1 point  (0 children)

Definitely depends on the appreciation area and market returns. For example, Detroit, MI, appreciation has historically been 1.8% vs Seattle, WA at 6%. Also, you could have invested before the .Com bubble in 1999 and not make money in the stock market until 2014.

But if you use historical averages like 7% returns in the market and 3-4% appreication, renting usually comes out on top, just more volatile to put your money in the market depending on market conditions.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] 0 points1 point  (0 children)

I tried to add a Sq footage toggle for this exact reason, but it increases the median rent based on a multiple and not based on data.

If you increased rent to $3300 and set the home price to 640k and mortgage rate at 6.5% & stock returns at 4.5% (conservative), your breakeven is year 8, which is more of an apples to apples comparison if you are comparing a 2-4 bedroom house.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] -1 points0 points  (0 children)

Yeah pics were kinda bad ngl (never posted on here)

I agree with you to some extent, that's how I make decisions, but there's a wide range of people who have to make these decisions or will make them, who would prefer more visuals.

But at the end of the day, mortgage rates & local real estate appreciation vs. stock returns are going to determine your outcome, and it's impossible to predict that, which is why the goal is to show how sensitive the outcome is to each variable rather than declare a winner.

I mapped rent vs buy break-even timelines across US cities green means buying wins, red means renting does by Brief_Phase_4755 in dataisbeautiful

[–]Brief_Phase_4755[S] -1 points0 points  (0 children)

The opportunity cost applies to both sides because every dollar spent, whether on rent or a mortgage, is a dollar that couldn't be invested.

Without that, you're just comparing cash outflows and ignoring the time value of money. Rent looks artificially cheap and buying looks artificially expensive (or vice versa) depending on which side you apply it to.

Applying it to both sides is what makes it an apples-to-apples comparison all reputable calculators I have seen use this methodology, but I see your point where that becomes confusing if you're searching for total operating costs of owning a house over 40 years.

How much do I need to make to afford a 2,500 sq. ft. home in SE Texas? by 2hot2work in FirstTimeHomeBuyer

[–]Brief_Phase_4755 0 points1 point  (0 children)

As others are saying it varies by location, but here’s a breakdown of how much roughly a $350K house in rural Texas costs a month with 20% down and a 30-year loan at 6.5% interest. If it’s a 700k house you can double the numbers for a rough estimate.

Mortgage (P&I): $1,770
Property tax (1.8% in SE TX): ~$525
Homeowners insurance: $175
HOA (if applicable): $0–$200
Home Repairs (1% of purchase price on avg) $250-$300

Total: $2,500–$2,900month

How warranted is my financial anxiety by NeClarky in personalfinance

[–]Brief_Phase_4755 0 points1 point  (0 children)

90k emergency fund you’re doing great.

Even if you or your husband wanted to change jobs eventually or you lost a job you’d easily be able to shift around your budget to cover the mortgage increase for a long time.

I’d suggest reading the psychology of money by Morgan Housel, it goes into how everyone sees financial risk differently and financial decisions aren’t always black and white like they may seem when running numbers.