The decision to either buy a home or rent is a difficult one in Queens, where prices seem to be rising every year.
But a new report shows that in several Queens neighborhoods, it may be more beneficial to purchase a home. StreetEasy, a real estate website, calculated the tipping point – the point in time in which the benefits of owning a home exceed the benefits of renting that same home – for neighborhoods in every borough.
The World’s Borough is home to neighborhoods with some of the shortest tipping points in New York City, which is good news for people interested in buying a home. In Queens, residents would need to live in their home for 2.7 years before their purchase would pay off. The tipping point in Manhattan is 7.7 years, more than double the national median of 2.1 years.
StreetEasy created a tool for users to calculate their own tipping points based on their apartment size and the neighborhood they’re interested in owning a home in.
The top 10 Queens neighborhoods with the shortest tipping point are as follows:
- Corona – 1.2 years
- Kew Gardens Hills – 1.2 years
- Woodhaven – 1.2 years
- Briarwood – 1.3 years
- Kew Gardens – 1.5 years
- Rego Park – 1.9 years
- Forest Hills – 2.1 years
- Woodside – 2.1 years
- Rockaway – 2.3 years
- Sunnyside – 2.3 years
Neighborhoods where it may be more beneficial to rent than to own include Flushing, where the tipping point is 30 years and Long Island City, where the tipping point is 26.7 years.
To calculate the tipping point of renting versus owning a home, senior economist Grant Long took several factors into account.
The costs of home ownership include mortgage principal and interest; federal, state and city taxes; homeowner’s insurance; projected closing costs; and maintenance fees and common charges as listed on StreetEasy.
For renting, the costs include brokers’ fees, renters insurance and monthly rent. He then conducted a cost-benefit analysis between the two to determine the “earliest point in time at which the net present value of owning a home exceeds the net present value of renting.”
StreetEasy does warn that the tipping point in every borough is increasingly on the rise. Home prices and mortgage rates are rising, while rents are falling, Long argues. The tipping point in Queens is up seven months since last year and the tipping point in New York City is 5.6 years, which reflects a one-year increase since 2016.
“For New Yorkers not planning to spend more than 5.5 years in their new home, renting is, on average, a more attractive financial choice,” the study reads.