Why Buying a Home Now Makes More Sense Than Renting
Wondering whether to keep renting or buy a home this year? If so, think about it. Affordability of rent remains a challenge and has been for years. Because historically rents tend to go up over time. Census data show that rents have risen fairly steadily since 1988. And data from Realtor.com’s latest rent report shows that rents are still rising, albeit at a slower pace than during the height of the pandemic.
“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).”
Owning a Home Could Be More Affordable if You Need More Space
The chart below compares the two options using national data on average rent payments from Realtor.com and average mortgage payments from the National Association of Realtors (NAR). As the table shows, depending on how much space you need, if you need more than two bedrooms, it’s usually cheaper to own than to rent.
So if you want to live in a place with more than two bedrooms for your family to live in, want more space to spread out your belongings, or want to use the extra space to pursue your hobbies. , it might make sense to consider having housing.
Homeownership Allows You To Start Building Equity
In 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.
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 homes over the past year was to build their own equity instead of someone else’s.