Is It Cheaper to Rent or Buy?

As home prices continue to rise, are you wondering if it makes more sense to rent or own your own home?  Well, it's not just home prices that have risen in recent years.  Rental prices have significantly risen as well.  According to recent studies, the median rent across the country's largest metropolitan areas has increased for 16 consecutive months.  Here ae some reasons why buying a home may make more sense for you than renting.

You Need More Space

Latest study data shows that if you need more space, it may be cheaper to buy a house than to rent a larger apartment or house.  With the median rental price of a 2 bedroom apartment nationwide at $2,104 per month, you just may be able to get into your own home for the same price or less - especially when you take into consideration the tax interest deduction and other savings that homeowners can realize.

Stability and Wealth Buliding

In addition to being more affordable depending on how much space you need, buying has two other key benefits: payment stability and equity.

When you buy a home you can lock in your monthly payment with a fixed-rate mortgage.  That’s especially important in today’s inflationary economy, where prices prices rise across the board for things like gas, groceries, and more.  Locking in your housing payment, which is likely your largest monthly expense, can provide greater long-term stability and help shield you from those rising expenses moving forward.  Renting doesn’t provide that same predictability, as your landlord can raise prices as much as the market will bear - or as much as the landlord wants!

Buying a home also provides you the chance to build equity, which in turn grows your net worth.  That can also improve your credit rating, resulting in lower borrowing costs for other items.  As you pay down your home loan over time and as home values continue to appreciate, so does your equity.   That equity can make it easier to afford another home in the future if you decide you need a bigger home, smaller home or want to purchase an investment or vacation home 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.  You're helping your landlord reap the benefits instead!