Whether to rent or buy has never been any easy decision but with today’s market which includes increased mortgage rates, record rents and home prices, and uncertainty of the nation’s economic state, the decision is even harder.
Typically, renting is often cheaper. Based on asking rents and monthly mortgage payments, renters usually pay 40% less per month than a first time homebuyer. In December 2022, it was more economical to rent than purchase in 45 of the 50 largest metropolitan areas; This is up 30 markets from the previous year.
When determining whether you should buy or rent, don’t just go by the price of the home. Take into consideration the monthly payment which includes principal, interest, insurance and property tax. If you plan on staying in the home for at least ten years and the price works for you, about one-third of your income, then purchasing might be your best bet. In the long run you’ll gain equity in your home.