Is Buying A Home Really Better Than Renting?
As a full time real estate agent I spend all day every day talking about real estate, the good and the bad. One conversation that seems to be coming up more often is the idea that renting in the long run is better than buying a home. Is it really?
First let’s take a look at what is happening in the rental market:
It’s crazy! Yet still some think that it is easier to afford a rent than it is a mortgage, is that true?
If we look at the historical data from 1985 thru 2000 the national historical data shows that it took 21% of your income to afford a mortgage while it was 26% to afford your rent payment.
But today with current mortgage rates it only take 15% of your income to buy a home as opposed to a staggering 30%!
Even if interest rates go up which most economist predict, it is still more affordable to buy a home as opposed to renting.
So if you think that you can’t afford a mortgage in reality you can’t afford to keep renting. Here are the average mortgage payments over the last 25 years:
It has increased in the last couple of years even though the mortgage rates are still low due to the increase in home prices. But even so it is less expensive to buy a home right now than at anytime since 1990!
It makes no sense to rent! Many think “but I don’t have to pay for repairs or pay property taxes.” Do you really think that your landlord is not including those costs into your rent? Do you think that they are renting it to you at a loss? Of course not, they are incorporating every expense they have on that rental PLUS a profit margin!
You must realize that either way you are paying a mortgage – your own or your landlords!
While there are indeed valid reasons to keep renting, here is another reason to consider buying.
Here is the average net worth in American family that rents as opposed to the average homeowner:
The average net worth of a homeowner is over 45 TIMES GREATER than the average net worth of a renter!
It’s not just the affordability now that should be taken into consideration, but also the impact in the future. When your kids are ready to go to college or when it comes time to retire having equity in your home is an advantage that should not be ignored.
And this gap is growing!
As you can see I believe that everyone that can should be purchasing a home! The cornerstone of all financial wealth begins with real estate.
Contact me TODAY and let’s get started.