Why Renting Might be Better Than Buying This Year (And Why It Might Not)

Renting a home is like embarking on a thrilling adventure, navigating through the twists and turns of the housing market. The cost of rent and home prices in the U.S. has been on a rollercoaster, soaring to new heights during the pandemic. But here’s the good news – our trusty rent vs. buy calculator now leans slightly in favor of renters for the first time in ages. Can we get a high-five for all the renters out there?

Breaking down owning a home

Owning a home is like having a piggy bank that grows over time. When you make mortgage payments, you’re not just covering a monthly cost, you’re investing in your very own piece of property.

Think of it like this: your home is a jar of cookies, and every mortgage payment is like adding another cookie to the jar. Over time, the jar gets fuller and fuller. This is what we call building home equity. It’s the difference between what your home is worth and what you still owe on it. If you ever decide to sell your house, any extra cookies (money) left in the jar after paying off what you owe are yours to keep. This can be a great way to save up money over time, like a long-term savings account.

Renting explained

Renting, on the other hand, is like paying to borrow someone else’s cookie jar. You don’t get to keep the cookies when you’re done, but that doesn’t mean it’s a bad choice.

Renting can be a really smart move, especially right now. Home prices have been high, and finding an affordable house to buy has been tougher than ever. So, for a lot of people in the U.S., renting is the way to go. Especially depending on where you are in life and what makes sense. Plus, renting gives you the flexibility to move and try out different neighborhoods without the big commitment of buying a house.

So, whether you’re saving cookies in your own jar (buying a house) or borrowing someone else’s (renting), you’re still making a smart choice for your future!

The rent vs. buy calculator

Beyond individual finances and the state of the national housing market, there are various factors to weigh in the rent vs. buy decision. The rent vs. buy calculator encompasses a multitude of variables, with distinctions between individuals and variations across different years.

Considerations such as age, lifestyle, career prospects and financial risk tolerance play a crucial role. Additionally, your preferred location significantly influences the decision-making process. Explore Redfin’s calculator to assess which option aligns better with your circumstances.

So, why should you consider renting in 2024? We’ve got six solid reasons to extend that lease:

Check our rent vs. buy calculator to see which is a more affordable option for you this year

The financial perks of renting in 2024

Is 2024 the year of the renter or the year to make that big investment in a house? Consider the pros of renting before you answer that for yourself.

1. More affordable living

Buying a home costs 25% more than renting in 2023. Last year set records for home prices, and buying demanded more of your paycheck than recommended by the experts. Plus, renting means you can invest the money you save on housing in other ways, like stocks or a retirement fund.

2. Costs less upfront

Buying a home is a big financial leap, but renting is like a financial soft landing. A security deposit is your ticket in, and you get it back if you leave the place as you found it. Not to mention, you skip the hefty down payment and closing costs that come with buying a house.

3. Fewer monthly costs

Homeownership comes with a bag of expenses – property taxes, mortgage interest and repair bills. Renting? It’s usually smoother sailing with cheaper renter’s insurance and fewer monthly bills. Plus, you don’t have to worry about the surprise costs that can pop up with owning a home.

no extra charge to your monthly rent for any maintenance repairs. Also no closing costs or mortgage insurance

4. No repairs or maintenance worries

Homeowners pay a handyman for unexpected expenses. Renters? We pass that torch to the landlord, and we’re off the hook for lawn care and snow removal. More time for you, less stress for us! And if something breaks, a call to the landlord usually gets it fixed at no extra cost to you.

no monthly mortgage payment or property taxes for you!

5. Flexibility in financial planning

Renting often allows for more predictable budgeting. Unlike the fluctuating costs associated with homeownership, renters enjoy a more stable monthly financial plan with fixed monthly rent prices. This stability makes it easier to plan for other financial goals and adventures.

6. Try before you commit

Renting is like test-driving different neighborhoods and house types before you commit to the real deal. It’s the perfect way to explore without a permanent commitment. Plus, if your needs or tastes change, you have the freedom to move on without the hassle of selling a house.

But hey, buying isn’t off the table in 2024. Here’s why it might be a better fit:

a home price, monthly mortgage payments and interest rate payment may be for you depending on your saving goals

The allure of homeownership in 2024

There are multiple benefits to paying a mortgage instead of renting, too. Consider some of these pros of homeownership.

1. More homes, lower prices

Housing experts are anticipating a significant increase in the number of homes available on the current real estate market. This influx is primarily due to various factors, such as new construction projects reaching completion and more homeowners deciding to sell. As the supply of homes increases, it naturally leads to a more balanced market.

2. Stable interest rates

In recent trends, mortgage rates have shown a tendency to stabilize, deviating from the previously observed fluctuations. This stability in interest rates is crucial as it directly influences the affordability of home loans for potential buyers. Experts in the field are predicting that this period of steadiness in mortgage rates will catalyze a surge in home purchases.

3. More options in prime areas

In 2024, the housing market in various desirable locations is experiencing a resurgence, offering more affordable options for homebuyers. This change presents a unique opportunity for those previously priced out of prime areas. As the market shifts, a greater availability of homes in these sought-after neighborhoods means potential buyers have a higher chance of finding a property that aligns with their preferences and budget.

between housing costs and a monthly rent payment - there are different opportunity cost associated with each option

The choice is yours

Whether you choose to rent or buy is a personal journey influenced by financial goals, lifestyle preferences and market dynamics. Renting offers flexibility, cost-effectiveness and a chance to explore different living scenarios. On the other hand, homeownership beckons with potential savings in a buyer’s market.

Rent or buy, the choice is yours. Here’s to finding the perfect home for your unique journey!

Check out houses and apartments for rent.

Looking to buy? See homes for sale here.

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