Buying a Home May Make More Financial Sense than Renting One
If rising home prices leave you wondering if it makes more sense to rent or buy a home in today’s housing market, consider this. It’s not just home prices that have risen in recent years – rental prices have skyrocketed as well. Rising prices will likely impact your housing plans either way. But there are a few key differences that could make buying a home a more worthwhile option for you.
If you need more space, buying a home may be more affordable.
As the graph conveys, if you need two or more bedrooms, it may actually be more affordable to buy a home even as prices rise. This doesn’t consider the interest deduction or other financial advantages that come with owning a home. It does help paint the picture that it may be more affordable to buy than rent.
Homeownership also provides stability and a chance to grow your wealth.
In addition to being more affordable depending on how many bedrooms you need, buying has two other key benefits…..payment stability and equity.
When you buy a home, you lock in your monthly payment. With inflation, prices rise across the board for gas, groceries, and more. Locking in your housing payment can provide greater long-term stability and help shield you from rising expenses. Renting doesn’t provide that same predictability.
When you buy, you have the chance to build equity which in turn grow your net worth. Homeownership is still considered one of the most reliable ways to build wealth.