Are you wondering whether it's time to buy a home or still rent?
Homeownership and renting have their own advantages and disadvantages. Homeownership offers a sense of pride and security while granting one the ability to build equity in their home which increases net wealth over time. Renting, on the other hand, does not give you the opportunity to make investments in your property that will appreciate over time or increase your net worth. Owning a house has many benefits one might not be thinking of: home owners can access tax deductions and have a comfortable retirement when they pay off the mortgage. In addition, your home’s value often increases over time, which makes it a great investment. I like to think of owning a home as a savings account.
If you are planning on buying a new home and need help deciding if it's better to rent or buy, here are three reasons why you should go ahead and buy!
1. Rent prices hit the 13th consecutive month of record highs. Nationally, single-family rent jumped 14% year over year in April, according to a report released Tuesday by the real estate data firm CoreLogic. Rent in several major metropolitan areas, particularly Sun Belt cities, rose much higher than that — with no signs of slowing down.
Here’s a look at the metros where rent prices are increasing the most:
- Miami: 40.8%
- Orlando: 25.8%
- Phoenix: 17.8%
- San Diego: 17.3%
- Las Vegas: 17%
- Houston / The Woodlands / Sugar Land: 9.8%
2. Interest rates are below their historical average of 7.77%. Interest rates over the last year have fluctuated now more than ever before, but they are still below the historical average. We
The average 30-year fixed interest rate dropped from 5.70% on June 30 to 5.30% on July 7, according to Freddie Mac. Interest rates fell 51 basis points (0.51%) over the last two weeks as recession concerns continue to grow. With the pandemic’s declining economic impact, inflation running at 40-year highs, and the Fed planning four more aggressive hikes, interest rates could continue trending upward this year.
Have you looked into why interest rates are “high” right now? – In June, makes biggest rate hike in 28 years to fight 2022 inflation. Wanting to stay on top of what the FED is doing? – https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
3. Home prices are plateauing, and the inventory of unsold existing homes is rising.
The National Association of Realtors says prices of existing homes soared 14.8 percent from May 2021 to May 2022 — and the median sales price surpassed $400,000 for the first time ever. This marks 123 consecutive months of year-over-year increases, the longest-running streak on record. (Prices are up a 45% since the coronavirus pandemic began in March 2020, according to NAR data.)
Is the housing market going to crash? – No, there are no signs that point to another burst of the housing bubble.. The last time the U.S. housing market was turned upside down was 2005 to 2007. Then home values crashed due to predatory lending practices. Lending practices are been cleaned up drastically since then.
How much money do you actually waste renting? – You will have to do some math to fully gather this information. You have many factors you must calculate. Rent x 12 months. Ideal purchase price x 110% per year you rent. Plus you will be x of months behind on building equity.
Even though renting may seem like a good option, there are several reasons why buying a home is a better choice. The benefits of buying a home go beyond saving on rental costs and increasing your net worth. But I do understand why one would choose to rent: renting might be the best option if you want flexibility to move or if job uncertainty might negatively impact your finances. And if the main reason why you are choosing to rent over buy is because of credit score reasons, I encourage you to speak with a lender on the chance, they have advice on how to raise your credit score.
I hope you have found this blog post super helpful. If there is anything else we can do for you, including helping you sell (or buy) a home, I would be honored to assist. I hope you have a great day/evening. Cheers, E + J.
We are so happy you found our little corner of the interwebs. We look forward to y'all reaching out to us. We love to answer questions and welcome them. Recently we created some local maps, and you can download those by clicking the image/link above. Below, you will find an index of some very helpful information to assist you in learning more about the Houston suburbs. If you are relocating to our neck of the woods, we hope you reach out to us, because we would love to help you by being your local realtor and friend. Thoughtfully written for you. Hugs, Jo.
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