If you are currently renting, you are probably asking yourself every year, should I renew my lease, find another rental, or purchase a home? It helps to understand the true costs of renting vs buying to determine the best decision for you moving forward.
In the past year, both current renters and new renters coming into the market have seen rents go up substantially accordingly to information noted from Realtor.com. In fact, three out of four renters who have moved in the past 12 months reported their rent had increased. This speaks to renters renewing their leases as well as new renters coming into the market. And if you look back at historical data, according to the US Census Bureau rents have been rising consistently since 1988.
So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. To sum it up/simplify it if you will … if trends continue as they have year after year, you can pretty much bank on the fact that rents will continue to rise.
Homeownership = EquityValue
These rising costs we are seeing today may just make you reconsider what other alternatives you may have. If you’re looking for more stability, it could be time to make homeownership your goal. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says – 4 Benefits for Owning a Home
“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”
aIf you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. There’s no need to wonder if you will need to adjust your budget to account for any annual rent increases from the landlord. When you are renting, you are building the landlords equity, NOT your own. As a homeowner you are building your own wealth – HUGE benefit! Let me repeat … as a renter you are building your landlords wealth … plain and simple! In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. With that in mind, as a renter your rent payment only covers the cost for you to live in residence. Whereas when you pay the mortgage on your home, you grow wealth through forced savings that ultimately builds wealth through the equity in your home.
If homeownership is your goal for 2023 – reach out to me, I would be happy to connect you with one of my recommended mortgage lenders to discuss the possibility, give you the information you need to help you get the process started, get pre-approved and on your way to your journey towards homeownership!
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