Why Renting a House is a Better Option than Buying Today
Are you wondering if this is the year to buy or continue renting? Consider this. Rent affordability has been a problem for many years. Rents have historically risen over time. Rents have been steadily increasing since 1988, according to data from the Census Bureau. Rents are still rising, but at a slower rate than at the heights of the pandemic, according to the latest rental report by Realtor.com: “In March 2023 the U.S. Rental Market experienced single-digit growth in the eighth consecutive month. . . Rents are much higher than they were during the normal pre-pandemic period. Owning a home may be the better option if rents continue to rise on a long-term basis. A fixed-rate mortgage allows homeowners to lock in their monthly payment for the entire term of their loan, which is typically 15-30 years. The graph below compares the two options using national data from Realtor.com on median rental payments and median mortgage payments from the National Association of Realtors. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent if you need two or more bedrooms:So, if you’re looking to live somewhere where you have two or more bedrooms to accommodate your household, give you more breathing room to spread out your belongings, or dedicate the extra space to practice your hobbies, it might make sense to consider homeownership.Homeownership Allows You To Start Building EquityIn addition to shielding you from rising rents and being more affordable when you need more space, owning your home also allows you to start building your own equity, which in turn grows your net worth. As home values rise and you pay down your mortgage, equity is built. This equity can help you achieve success in the future, as you can use it for a bigger home. According to Zonda’s research, millennials bought their homes in the past year to build their equity, not someone else’s. Bottom LineIf you are trying to decide whether or not to buy a house, talk to a trusted agent to explore your options. Rents are rising and it may be more sensible to pursue your dream.
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