It’s no secret: Homeownership is a huge responsibility. There are many reasons that someone might choose to rent rather than buy. But some people haven’t revisited that decision recently and could be influenced by outdated data. Some people could actually be leaving money on the table by not reevaluating their decision to stay renters.
Let’s take a look at the top reasons renters give for not buying . . .
House prices are too high right now
The most recent data shows that home prices appear to have bottomed out and are now on the rise again. In fact, experts project home prices will rise steadily and return to more normal levels of appreciation after 2023. When you purchase a home, you own an asset that traditionally increases in value over time. It’s likely that your home will have a higher resale value if you decide to move again. You could wait for a dip in the market and try to buy then, but that usually means there are other economic issues at stake that may make it impossible for you to buy, or the cost might be higher in other ways—like interest rates.
It’s cheaper to rent
Rents have risen consistently for several decades. In fact, rent amounts are projected to increase by 6.3% in 2023. A fixed-rate mortgage ensures you’re paying the same amount each month for the life of the loan. Depending on the rent amount, buying a home can actually be cheaper than renting.
I don’t want to pay for or do repairs
Homeownership is an investment, and ongoing maintenance and upkeep are a definite part of that. No want wants to pay for or do repairs. However, some landlords and lease terms include the tenant being responsible for the cost of some repairs up to a certain dollar amount or type of repair—including maintenance and upkeep.
House values could go down and I’d lose money
With the way rents have risen so dramatically over time, it may make sense to build your own equity instead of building equity for your landlord. Homeownership is a long-term investment that allows you to build wealth, increase your net worth, and become more financially stable. It’s true, home prices have and can go down. We haven’t seen it in a while. However, when was the last time you saw rent payments go down?
I don’t have enough money for a down payment
Many people think you need to put down 20% of the purchase price when you buy a home. However, with programs like FHA loans, VA loans, and USDA loans, some qualified buyers are able to put down as little as 0 to 3.5% down. A bigger down payment may be helpful in getting you a better rate or lowering your payments, but that takes time. And, in the time you’re saving up, interest rates and home prices might be going up!
I want the freedom to move
If you know you won’t be in the home for two or more years, you might need to be in a more fluid situation. However, if it’s about being “tied down,” renting might not be the best option. You have to sign a lease and pay a penalty or the remainder of the lease if you move. Selling a home isn’t super complicated if you need to move, or you might decide to become a landlord and rent it out!
If you’re ready to buy a home (or even just talk about it), reach out! I’m here to help walk you through your options.
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