Why Buying A Home Makes 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. Because of all the new people that moved to South Florida, rent has risen faster than almost any area in the country making us one of the most expensive place to live currently. That means as long as you need a place to live, rising prices will likely impact your housing plans whether you rent or you buy.

There are few key differences that can make buying a home more worthwhile for you. If you need more space, buying a home may be more affordable. What you may not realize is that according to the latest data from Realtor.com and The National Association of Realtors, it may actually be more affordable to buy than rent depending on how many bedrooms you need.

This graph uses the medium rental payment and medium mortgage payment across the country to show you why. As the graphs show, if you need two or more bedrooms, it may actually be more affordable to buy a home even as prices rise.

While this doesn't take into consideration, the interest deduction or other financial advantages that come with owning a home does help paint the picture that it's maybe more affordable to buy than rent for that unit size based on nationwide averages. So, if one of the factors motivating you to move is the desire for more space, this could be the added encouragement that you need to consider home ownership.

In addition to potentially being more affordable depending on how many bedrooms you need, buying has two other key benefits: payment stability and equity.

We've all heard the horror stories lately of landlords raising rent 500 dollars or more per month. When you buy a home, you lock in your monthly payment with you fixed rate mortgage. With inflation, prices rise across the board for things like gas, groceries, housing, and more. Locking in your housing payment which is likely your largest monthly expense, can provide long term stability and shield you from those rising expenses moving forward.

Renting doesn't provide that same predictability. In fact, there's a good chance that your landlord will raise your rent to counter inflation. Not to mention that when you buy, you have the chance to build equity which in turn grows your net worth.

Home ownership is still considered one of the most reliable ways to build wealth in America. When you make monthly mortgage payments, you're building equity in your home that you could tap into later on. When you rent, you aren't investing your financial future in the same way.

Bottomline, if you're trying to decide wether to keep renting or to buy a home, let's connect to explore your options. With home equity and a shield against inflation on the line, it may make more sense to buy a home if you're able to.