Rent rises across our nation are persuading many householders that it’s time to own their home and face down rising inflation and mortgage costs.
New data from Redfin shows rents for apartments have increased 15% across the US in the past 12 months, and the median rent has risen above $2,000 for the first time.
Renters in some cities face severe pressures. Rents have increased 32% in Nashville and 30% in Seattle, Cincinnati and Austin. Folks in Los Angeles now pay an average $3,400 a month for their apartment.
Many renters are now finding that it would be cheaper to buy than continue renting. That sounds counter-intuitive, but for many first-time buyers the numbers stack up in favor of purchase.
Even though mortgage costs have risen into the 6% range, still low by historical standards, banks are chasing first-time buyers with increasingly attractive rates.
Additionally, property values have held steady or increased despite the sequence of rate rises by the Federal Reserve, demonstrating how real estate continues to be an outstanding investment.
This list may help you think about whether buying is a better option to renting for you.
Is it better to rent or buy?
When asked this, I respond with my own question: Do you want equity in your own home, or do you want to pay rent and contribute to the equity in somebody else’s?
Competitive rates
Make the most of the competition between lenders to win your business. Whether you’re using a broker or researching mortgages on your own, you should be able to strike an attractive deal in the current environment.
Long-term outlook
America’s real estate sector remains strong despite recent economic setbacks. Rises in mortgage costs do not appear to have scared anyone away. In our neighborhood, we’re seeing more properties come onto the market. There are some excellent buying opportunities out there.
Should you take the plunge?
Ultimately, it comes down to your personal circumstances and whether you have regular, stable employment that can regularly meet mortgage payments. If you’re saving for a deposit and worry about your rent increasing, this is probably a great time to purchase.