In most major cities in the U.S. when it comes to home affordability, buying a home instead of renting is usually the less expensive route. For years individuals have put off homeownership in order to save more money, but with rent prices steadily rising month after month, it may be time to rethink your money saving strategy.
According to ATTOM Data Solutions’ 2017 Rental Affordability report, in 66% of the housing market buying is more affordable than renting when looking at monthly payments alone. However, homeownership comes with other costs such as a sizable down payment and other fees, but when thinking of long term investments, owning your home can produce the higher savings.
When deciding to own a home, there are a number of factors you must consider such as the amount of time you plan on staying in your home and if you’re financially stable enough to take on a mortgage. However, if you find yourself throwing money into a property you’ve been renting long term, it’s important to keep in mind you are still technically paying a mortgage, just not your own.
If you are at a point in your life where you can realistically jump on the real estate train but you have made a decision to forego homeownership, now may be the time to opt in. Rates are rising, but they’re still relatively low by historical standards. Also, as you may already know, in many housing markets inventory is low and may continue shrinking. This means, there will be even fewer homes to choose from this time next year than there are now. So, if you’re on the fence about whether you should renew your lease or begin searching for a new home of your own, weigh your options and decide which choice makes the most financial sense for you. Check out our calculator Am I better off renting? to help make your decision!