When deciding where to live, everyone must decide at some point whether to buy or to rent. Regardless of your age or stage of life, when you choose where to live, you make that decision. Many people assume that they cannot afford to buy a home – that it is simply not in the budget. But, we are now seeing that, in most cases, it is actually more affordable to buy a home than it is to rent. The more you are able to put down, the more true this becomes. Either way, odds are that if you are able to purchase a home, it will likely cost you less than renting.
This is good news for potential homeowners who have been concerned about rising mortgage rates and home prices. In spite of both of these things it is still a better financial investment and less expensive than renting. RealtyTrac points out that the statistics speak for themselves but if potential homebuyers are on the fence, now is the time to purchase a home, before mortgage rates rise too significantly, “ATTOM Data Solutions…released its 2017 Rental Affordability Report, which shows that buying a home is more affordable than renting in 66 percent of U.S. housing markets analyzed for the report…“While buying continues to be more affordable than renting in the majority of U.S. markets, that equation could change quickly if mortgage rates keep rising in 2017,” said Daren Blomquist, senior vice president with ATTOM Data Solutions, the new parent company of RealtyTrac. “In that scenario, renters who have not yet made the leap to homeownership will find it even more difficult to make that leap this year…The report found making monthly house payments on a median-priced home — including mortgage, property taxes and insurance — is more affordable than the fair market rent on a three-bedroom property in 354 of the 540 counties analyzed in the report (66 percent).”
One of the most important things to remember is that not only is buying more affordable than rent, but it is a better investment. Owning a home is essentially a built-in savings account. Every month when you pay a mortgage instead of rent, you actually build up equity and can then put that money towards having a bigger down payment for your next home and building your net worth. Further, there are significant tax advantages for homeowners. When it is time to decide whether to rent or buy, take a close look at your savings and monthly budget and speak to an experienced lender who can help you make the best financial decision.