Rent vs Buy Analysis — Jersey City, NJ

VERDICT

Buying wins — about $160K ahead by year 10, break-even in year 2.8.

This scenario assumes 5.8%/yr home appreciation — 2.8 points above DwellQ’s 3% long-run default (FHFA HPI). A lower rate narrows the gap.

That year 2.8 break-even is the Q+ figure — tax modeling pulls it forward. Without tax deductions (the free tier), the same scenario breaks even in year 3.4.

Your estimated $27,061 in tax savings (Year 1: $4,855; avg $2,706/yr over 10 years) moved the margin to $159,520 in buying’s favor. Run without tax modeling — the free tier — the same inputs break even in year 3.4 instead of year 2.8.

SALT cap analysis

In year 1 this household’s state and local taxes total $18,406 against a cap of $40,804 — nothing is lost, so all $18,406 counts. That does not hold. The cap is scheduled to fall in 2030, and by year 10 of this analysis SALT has grown to $24,677 against a $10,000 cap — $14,677 of it disappears. That is why the annual benefit falls from $4,855 in year 1 to $1,323 in year 10, and the report models it year by year rather than multiplying year 1 by 10.

Deductions are also credited a year late — you claim them when you file. Year 1 carries the full cost of owning and the savings start appearing in year 2, which is why the Tax Sav column below is shifted by one row.

■ Buying   ■ Renting & investing  · values in $K

Measured against the $140,000 MAGI above, using the report’s own bands: housing over 28% of income reads Caution, over 35% High; DTI over 36% Caution, over 43% above the conventional limit.

8 columns — scroll the table sideways for the rest.

PMI never applies on this run, and the reason is the down payment, not the LTV curve: the engine charges mortgage insurance only when the down payment is under 20% (its needsPMI rule), and this run puts 20% down. That is why Total PMI Paid reads $0above rather than being left out. LTV, shown against the original purchase price of $575,000 rather than the projected value, starts at 80.0% and ends at 67.3%.

13 columns — scroll the table sideways for the rest.

Why the Tax Sav column doesn’t add up to its total. Deductions arrive a year late — you claim them when you file. Year 1 gets none, Year 2 gets Year 1’s, Year 3 gets Year 2’s, and so on down the column. That leaves Year 10’s deduction ($1,323) arriving after this table ends: the TOTAL counts it, no row shows it. And because Buy Net is Buy Gross minus Tax Sav, its total inherits the same $1,323 gap with the opposite sign — a lower net cost, not a higher one.

5 columns — scroll the table sideways for the rest.

Starting Capital is the down payment plus closing costs the renter never spent — a constant, by definition. Net Worth is shown pre-tax.

Based on these inputs, buying is projected to build $159,520 more in net worth over 10 years. The paths are projected to cross around Month 34 (Year 2.8). Tax deductions are estimated to save $27,061 over the period. Each year’s deductions are claimed when you file, so they are credited from the following January — Year 1 carries the full cost of owning and the savings appear from Year 2 onward.

Key sensitivities: Home appreciation has the largest impact on this outcome. Each +1% in annual appreciation is typically worth $58K+ over 10 years. Mortgage rate, investment returns, and selling costs are the next most impactful variables.