The housing market plays a huge role in whether people opt to purchase instead of rent a home. Even though home prices have been on the rise, renting may still not be more financially sound than buying. In this article, Andrew Shader explains why owning your home might make more financial sense than renting, despite the current market.
Buying a home is a significant investment that many people plan and prepare for over several years. From location to budgeting to mortgage rates and everything in between, there are so many details that need to be considered before you can wisely invest in a home — but it may just be worth it.
Home Ownership Is More Affordable for Those Who Need More Space
If you’re in a housing situation where you need multiple bedrooms for everyone in your household to live comfortably, owning a home might still be more affordable overall than renting in the current housing climate.
The median rent of all housing units in June 2022 was $1,876 overall, with the average for two-bedroom units being $2,104. For the same month, the average monthly mortgage payment was $1,842.
This means that not only was the average mortgage payment significantly lower than the average two-bedroom monthly rental, but it was also slightly lower than the average cost of renting housing overall.
Home Ownership Is a Long-Term Investment
You may have heard it said that real estate is one of the best investments you can make. This is a true statement. Property is unique in that it is one of the lone physical assets you can invest in that only continues to appreciate in wealth.
This means that if purchasing a home is a feasible option for you, you’ll be set with an appreciating investment for as long as you choose to continue ownership. Even if the value of the home itself might fluctuate with the market, the value of the property will continue to increase over time.
Home Ownership Is a Great Way to Provide Financial Stability
Though purchasing a home might be a greater commitment than continuing to rent month after month, this commitment comes with certain financial benefits. One of these key benefits is that once you’ve paid your down payment, you’ll be entering into a fixed-rate mortgage that you can depend on in perpetuity (or until you refinance).
Depending on the laws in your state and how much freedom landlords have to raise rent according to changing property values, your housing costs could increase by hundreds of dollars if you remain in the same rental unit for long enough.
With a fixed-rate mortgage, you won’t have to worry about struggling to meet rent that is arbitrarily raised by your landlord.
Who Is Andrew Shader?
Real estate investor, developer, and entrepreneur Andrew Shader began his career as an insurance mogul before discovering a true passion for real estate. He provides successful outcomes for a huge variety of Fort Lauderdale residents and specializes in increasing property values to suit his clients’ needs.