People often ask if now is a good time to buy a home, but nobody ever asks whether or not it’s a good time to rent. Regardless, we want to make certain that everyone understands that now is not a good time to rent.
Drawbacks of Renting
While there are plenty of good reasons to rent a home, in the long run, it’s not doing anything to propel your finances or establish a household. Not to mention the lack of control you have over your living space. When you rent, you’re really at the mercy of the home’s owner. For instance, if the owner decides to sell the home or raise the rent beyond your affordability. You could be forced to move, no matter how much you enjoy living there.
Additionally, renting is a game that goes financially nowhere. When you own a home, each mortgage payment is an investment. Instead of your payments going to a management company or landlord, they go directly to pay off your home (minus interest). Each payment gets you that much closer full homeownership. When you pay rent, you’re not investing in your future, you’re merely paying for the privilege of residence.
The Census Bureau recently released their 2018 first quarter median rent numbers. According to their report, here is a graph showing rent increases from 1988 until today:
As you can see, rents have steadily increased and are showing no signs of slowing down. If you are faced with making the decision of whether or not you should renew your lease, you might be pleasantly surprised at your ability to buy a home of your own instead.
Buy Now to Pay Less
Prices on homes are high right now, there’s no denying that. However, the actual cost is historically low when you take into account current home prices, mortgage rates, and wages. Meanwhile, homes are continuing to appreciate which means an increase in interest rates. All this is to say that right now is the right time to buy. Costs are low, inventory is high, and the longer you wait, the more interest will rise.
One way to protect yourself from rising rents is to lock in your housing expense by buying a home. If you are ready and willing to buy, contact us for a FREE consultation!