RENT OR BUY IN 2022?
Living in an expensive city like San Francisco is not in the question for most home buyers, but for those who want to rent it is possible. If rents are high in areas with high home prices, tenants can find a more affordable monthly payment than home buyers. [Sources: 7]
This can make it difficult to decide whether to continue renting or buy a home, especially if you don't want to pay too much. Depending on where you live and the local housing market, the cost of renting or buying varies. In many cases, renting is cheaper than buying a home, but there are upfront costs. [Sources: 0, 7, 12]
Some people believe buying a home or renting it out is a sensible decision. To avoid paying too much for a house, she says the decision to buy or rent depends on where prices go. [Sources: 0, 13]
Whether or not you should rent a house or buy it may seem like an apples-to-apples comparison, given the monthly cost. For some cities and people, buying a home may make more sense than for others, but for some, renting is the better choice. If someone decides to rent rather than buy a year or two rather than rent, it is possible that the demand for homes and house prices will fall but the mortgage rates could rise and you would be paying thousands of dollars in interest. [Sources: 1, 3, 4]
If closing costs are a projected part of a home sale or you plan to move in a few years after buying your home, renting could help you with a larger portion of your equity. If you want to pay off your house in cash, you can rent for several years without worrying about rising mortgage rates that will force you to a smaller home. If, on the other hand, you are not certain whether you can live in a house or feel uncomfortable spending on a house more than you planned, it may be better to keep the lease at least a while. [Sources: 0, 4]
Buying a home is cheaper in most areas of the US, according to the National Association of Realtors (r) report, which shows that six-year mortgage payments are lower for homeowners than for renters. Long-term buying is paying off because buyers are busy enough to weather a recession and the rental income they generate is comprised of monthly income and further tax relief. [Sources: 8, 12]
Taking into account the purchase price of a home, down payment, closing costs and monthly mortgage costs, these are compared with the monthly rental costs and subsequent assumed costs over a given period. You can determine your estimated time to get home by checking yourself and asking if you're conservative about buying a home, said Leonard Steinberg, a broker with Compass in New York. [Sources: 9, 12]
The length of time you plan to stay in your home is an important factor to consider when making a purchase or rental decision. There is plenty of space to find your dream home before you decide to step from rent to purchase. [Sources: 2, 3]
Before you take the plunge and buy or rent a home, make sure you choose the option that best suits your goals and your financial situation. Buy a home may seem tempting, but there are many reasons why renting a property is the best financial move for you. The choice between renting and buying has less to do with home prices and more to do with whether you are willing to be a homeowner. [Sources: 2, 9, 11]
If you are interested in buying a house but are not sure the time is right due to the crazy competitiveness of the current real estate market. With mortgage rates at record lows, you may even be tempted to buy a home to make the most of. If you are willing to make the long-term roots in a home and feel that you can afford a sale price that is higher than you would expect, now is a great time to buy. [Sources: 0, 6]
Make sure your mortgage payment, including principal, interest, property taxes, homeowner insurance (PMI) and HOA fees is no more than a quarter of your monthly take-home income, leaving plenty of space in your budget for other goals, such as saving for retirement or setting aside money for college funds for your children. [Sources: 1]
Deciding whether to buy or rent your home requires a complex decision-making process. If you think about how long you plan to stay at your next location, your savings budget and what unexpected expenses might look like, you can figure out whether renting or buying your next home makes sense. Before you decide whether to rent or buy a house, you need to talk to yourself in financial circles. [Sources: 2, 3, 9]
Job insecurity, a lack of ideal housing, high down payments, high home prices and strict mortgage requirements can make buying a home a difficult decision for those who want to rent or have a basement. [Sources: 8]
Florida Atlantic University real estate economist and associate dean Ken H. Johnson points out that while the investing market is stronger and more stable than the real estate market, it is pushing Floridians to rent rather than buy. Johnson says that the cost of a home in Florida will soar, but not as much as the price of a home that sells for more than they estimate in many situations. [Sources: 10]
If you are interested in buying or renting in Milton, Lewes, Rehoboth Beach, Dewey Beach, Bethany Beach, or Fenwick please consider reaching out to me (Matt Wright of Iron Valley Real Esate @The Beach. I will do my best to make sure that all of your questions and concerns are answered.
-Matt Wright
##### Sources #####
[0]: https://www.gobankingrates.com/investing/real-estate/is-it-better-to-buy-or-rent-in-2021-experts-weigh-in/
[1]: https://www.ramseysolutions.com/real-estate/buy-vs-rent-myths-busted
[2]: https://time.com/nextadvisor/mortgages/renting-vs-buying-a-home/
[3]: https://smartasset.com/mortgage/rent-vs-buy
[4]: https://houwzer.com/blog/should-i-sell-my-house-and-rent-until-the-market-cools
[5]: https://www.forbes.com/sites/elenabotella/2021/07/22/is-it-really-better-to-rent-these-days-than-buy-price-to-rent-ratios-tell-the-story/
[6]: https://www.fool.com/mortgages/2020/12/12/should-you-rent-a-home-or-buy-one-in-2021/
[7]: https://delphirealtygroup.com/pros-and-cons-for-renting-vs-buying-a-home-in-2021/
[8]: https://managecasa.com/articles/buy-vs-rent/
[9]: https://www.cnn.com/2021/02/24/success/rent-or-buy-feseries/index.html
[10]: https://www.news4jax.com/news/local/2021/07/23/should-you-buy-a-house-now-or-rent-until-the-housing-market-cools-off/
[11]: https://www.thesimpledollar.com/financial-wellness/news/3-reasons-it-might-be-better-to-rent-in-2021/
[12]: https://www.quickenloans.com/blog/should-you-rent-or-buy
[13]: https://www.investopedia.com/articles/personal-finance/083115/renting-vs-owning-home-pros-and-cons.asp