If you’ve been pondering buying a house this year, but are having second thoughts because of the current rising home prices and increasing mortgage rates, then here’s something you should consider. According to the latest report from ATTOM Data, in the majority of the country, owning a home is actually much more affordable than renting.
In the latest Single-Family Rent Index from CoreLogic, single-family rent has the fastest year-over-year growth in over 16 years when comparing data for November each year.
What this means for you, potential home buyer, is that while it’s true that home prices and mortgage rates are rising, that also includes monthly rents. As a prospective buyer, rising rates and prices shouldn’t faze you because rents are skyrocketing. The major difference is, when you rent, the rising cost goes directly to your landlord’s pockets and it does not deliver any form of return for you.
In contrast, when you buy a home, your monthly mortgage payments serve as a form of forced savings. Over time, as you pay down your loans and as home values continue to rise, ultimately, you’re building equity and by default, your own net worth. Not only that, but you’ll lock in your mortgage payment for the duration of your loan which is usually 15 to 30 years, all the while giving yourself a stable and reliable monthly payment.
If you’re still asking yourself if you should keep renting or if it’s the time to buy, remember that homeownership still remains the more affordable option. If we phrase it this way, the real question becomes: is renting worth it?
If you’re weighing your options between renting and buying, it’s important to look at the bigger picture. It’s true that buying a property can feel like a daunting process, so having a trusted advisor on your side is key. Work with a Landon Pacific agent to explore your options so you can learn more about the benefits of owning a home today.