Why Purchasing a Home is a Smarter Option Than Renting Today
- The Jade Zivko Team
- May 4, 2023
- 2 min read
If you're contemplating whether to continue renting or purchase a home this year, consider this: rental affordability has been a persistent issue due to the historical trend of rent prices increasing over time, according to Census data.
Although rental growth has slowed down from pandemic heights, the latest report from Realtor.com still shows rising rental rates. The median asking rent in March 2023 was $1,732, which is $354 (25.7%) higher than pre-pandemic levels in 2019. With rental rates considerably higher than in normal years, owning a home with a fixed-rate mortgage may be a better alternative, particularly with the possibility of rent increasing each year.
“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).”
Homeowners with a fixed-rate mortgage can lock in their monthly mortgage payments for the loan's duration. Additionally, owning a home might be more cost-effective, particularly if you require two or more bedrooms.
Owning A Home Enables You To Initiate the Process Of Accumulating Equity.
Apart from offering protection against rent hikes and being a more cost-effective option for larger living spaces, homeownership provides an opportunity to start accumulating equity, which can boost your net worth. As home values typically increase with time and you repay your mortgage, you gradually build equity.
This equity can be beneficial in the future since it can be utilized to facilitate a move to a larger residence. This is why, according to Zonda, the primary reason why millennial homeowners purchased a home in the past year was to build their own equity rather than paying someone else's.
Let's Figure It Out Together
If you are struggling to choose between buying a home or renting, let's discuss your possibilities. Given the escalating rental prices, it may be worthwhile to consider actualizing your aspiration of becoming a homeowner.
Jade Kim Zivko
(216) 338-5918
source of information: simplifyingthemarket.com
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