Rental Affordability: Should You Rent or Buy a Home? | Exploring the Rising Rents and Benefits of Homeownership in 2023
Are you tired of paying rent every month and wondering if you should take the leap and become a homeowner? With rental affordability still being a challenge and rents steadily increasing over time, it may be time to seriously consider homeownership.
According to data from the Census, rents have been climbing steadily since 1988, and the latest rental report from Realtor.com shows that rents are continuing to grow today, even though it’s at a slower pace than during the height of the pandemic. In March 2023, the median asking rent was $1,732, which is $354 (25.7%) higher than the same time in 2019.
With rents much higher than they were in pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. Homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years), while renters have no such certainty.
Furthermore, owning a home may be more affordable than renting if you need two or more bedrooms. National data on median rental payments and median mortgage payments shows that owning is typically more affordable if you need two or more bedrooms. Owning a home can give you more space to spread out your belongings, practice your hobbies, and accommodate your household.
Another advantage of owning your home is that it allows you to start building equity, which grows your net worth over time. As home values typically rise over time and you pay off your mortgage, you build equity. This equity can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line. According to Zonda, the top reason millennial homeowners bought their home over the past year was to build their own equity instead of someone else’s.
In conclusion, if you’re trying to decide whether to buy a home or continue renting, it may make more sense to pursue your dream of homeownership. Let’s connect to explore your options and see if owning a home is the right choice for you. Don't wait for rental prices to continue rising; take control of your financial future by investing in your own property.