Owning a home is one of the biggest investments of most people’s lifetime, and for most prospective homeowners it just keeps getting harder. On top of everything, the price of buying a house has skyrocketed. This means more and more people are asking themselves the question, “Should I just keep renting?”
There are a lot of factors at play when it comes to making this kind of decision. Buying a house is a sound investment for some people, while renting might be a better option for others. So how do you know which group you belong to? Here are a few things you should consider when deciding whether to buy, or just keep renting:
Renting can make a lot of sense for a lot of people
While in some markets home prices are hitting the stratosphere, rents are staying pretty down-to-earth, overall. If you’re building toward that purchase, renting is certainly more sensible. Continuing to rent at a more reasonable price should allow you to build that savings and help you afford a better home in a year or two.
Not only is renting cheaper in a lot of the United States right now, but it can also save you money in other ways. It’s true that you’re not building equity in your home while you’re renting, but you are saving money and stress on things like property tax, lawn care, and unexpected expenses like replacing your water heater. One of the best things about renting? All of that stress is your landlord’s problem.
Renting also gives you a lot more flexibility. You’re not locked into a long mortgage, and that can make things a lot easier if your life changes in the next few years.
Prospective home buyers need to be aware of the market
A lot of folks who have been thinking about buying a house recently have gotten really excited about mortgage rates hitting record lows. The problem is, mortgage rates are only part of the equation. Even though you can get a really good rate, homeownership has become an intimidatingly expensive prospect for many people.
When the market is this competitive, sellers often receive even higher offers than they expected. In a lot of cases, potential buyers have found themselves caught in a bidding war and even foregoing the inspection or any contingencies. If you’re looking to be a first-time homeowner, this is far from the ideal situation.
All in all, what we’re looking at is truly a seller’s market, and buyers need to be aware of what that means. You might find the process more difficult than it would be otherwise, and you might have to compromise on some of the things you want. All things considered, you might not get the house of your dreams, and you need to be ready for that.
There are still good reasons to have your heart set on a house
We don’t want to discourage anyone from buying a house, or to say that renting is always better. Owning your own home still has plenty of advantages over renting. Whether your reasons are practical, emotional, or financial, buying a house can still be a good decision, even in a competitive market. If you’ve got the funds for a competitive offer, investing in a home is usually a sound financial decision.
There are always a variety of motivations for upgrading to a house. Maybe your family is growing, you’re adding a new family member and you just need more space. And yes, pets count too! Some rentals aren’t dog or cat friendly, and rents are often higher when pets get involved.
Or perhaps your work has gone fully digital, and you want an office space instead of setting up your DIY green screen in your bedroom every day. Maybe you need extra space for your hobbies, or maybe you just want the peace of mind that comes with actually owning the place you live.
Deciding to buy a house is, at its heart, an individual decision. Each home buyer has their own unique circumstances. Just be flexible and do your due diligence.