Be a Home Owner
If the current housing market has you debating whether it makes more sense to rent or buy a home, take this into account. Rental prices have also skyrocketed in recent years, in addition to home prices. According to a recent article on realtor.com:
“The median rent across the 50 largest US metropolitan areas reached $1,876 in June, a new record level for Realtor.com data for the 16th consecutive month.”
This means that your housing plans will almost certainly be affected by rising prices. However, there are a few significant differences that might make purchasing a home a more advantageous choice for you.
If You Need More Space, Buying a Home May Be More Affordable
What you may not know is that, depending on how many bedrooms you require, buying a home may actually be more affordable than renting, according to the most recent data from realtor.com and the National Association of Realtors (NAR).
Even though prices are rising, purchasing a home may be more cost-effective if you require two or more bedrooms. According to national averages, it may be more affordable to buy than rent for that unit size, even though this doesn't account for the interest deduction or other financial benefits that come with home ownership. So, if needing more space is one of the things driving you to move, this might be the extra push you need to think about buying a home.
Homeownership Also Provides Stability and a Chance To Grow Your Wealth
Depending on the number of bedrooms you require, purchasing may also be more affordable. Buying also has the advantages of equity and stable payments.
With a fixed-rate mortgage, you can secure your monthly payment when you purchase a home. And in the inflationary economy of today, that is especially crucial. With inflation, the cost of everything increases, including groceries, gas, and other items. Your housing payment, which is probably your biggest monthly expense, can be fixed, which can give you more long-term stability and protect you from future price increases. That same level of predictability is not offered by renting.
“…if you buy a house and secure a fixed-rate mortgage, that means that no matter how much prices or interest rates go up, your fixed payment will stay the same every month. That’s an advantage over renting since there’s a good chance your landlord will raise your rent to counter inflationary pressures.”
Not to mention, when you purchase, you have the opportunity to increase your equity, which raises your net worth. This is how it functions. Your equity increases as you pay off your mortgage over time and as home values rise. And if you decide later on that you need a larger home, that equity may make it simpler to move into one in the future. Once more, the CNET article is helpful in explaining:
“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home that you can tap into later on. When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage.”
Work with a reputable real estate expert to explore your options if you're trying to decide whether to keep renting or buy a home. If you have the means, it might make more sense to purchase a home because you'll have home equity and a protection against inflation.
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