Why Buying a Home Makes More Sense Than Renting Today
Wondering if you should continue renting or if you should buy a home this year? If so, consider this. Rental affordability still presents a challenge and has been for years. That’s because, historically, rents trend up over time. Data from the Census and Realtor.com shows rents have been climbing pretty steadily since 1988:
“In March 2023, the U.S. rental market experienced single-digit growth for the eighth month in a row . . . The median asking rent was $1,732, up by $15 from last month and down by $32 from the peak but is still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).”
With rents much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if rents continue to increase each year. In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years).
Owning a Home Could Be More Affordable if You Need More Space
The graph below uses national data on the median rental payment from Realtor.com and median mortgage payment from the National Association of Realtors (NAR) to compare the two options. As the graph shows, depending on how much space you need, it’s typically more affordable to own than to rent:
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 Equity
Owning your home also allows you to start building your own equity, which in turn grows your overall net worth.
And, as home values typically rise over time and you pay off your mortgage, you build equity. That equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. That’s why, according to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.
Bottom Line
If you’re trying to decide whether to buy a home or continue renting, let’s connect to explore your options that makes sense for you.