Originally published on October 30, 2023, by Nicole Bachaud for ZIllow.com.
The cost of buying a home has soared over the past few years with home values near record highs and mortgage rates higher than they’ve been in 20 years. New home buyers can expect to spend approximately 13.5 years in their house before they would be able to sell at a profit over the purchase, mortgage interest, and sale costs that went into the home.
Zillow’s analysis took into account typical home values and forecasted home value increases based on Zillow’s Home Value Index, and assumptions for closing costs, agent fees at the time of sale, home maintenance costs and interest payments. Estimates are also based on the current market conditions as of the time of the analysis (July 2023). [1] Varying down payment percentages and maintenance costs indicate different profit timeline durations.
- A 3% down payment would require 13 years and six months to make a profit.
- A 5% down payment would require 13 years and three months to make a profit.
- A 10% down payment would require 12 years and seven months to make a profit.
- A 20% down payment would require 11 years and three months to make a profit.