When Is Buying More Affordable Than Renting?

Realtor.com^® nailed it when they said the U.S. housing market was in for another whirlwind year. Its 2022 housing forecast predicted continued increases in housing prices, rent and mortgage rates in "a mixed bag of housing affordability challenges and opportunities."

We've heard a lot about rising housing prices over the past few years, but rents are projected to increase at a pace of 7.1% compared to 6.6% for home sale prices. The report even goes so far as to say that buying a starter home would be cheaper than renting in some of the country's largest metropolitan areas.

Choosing whether to rent or buy is a huge decision in any market. Fear of making "the wrong decision" intensifies as the market tightens. Still, you may be surprised to find that you can afford to buy after looking at your financial picture.

Consider these advantages of buying over renting.

Homeownership Is an Investment
At the end of a lease, you'll walk away with nothing. At the end of a mortgage, you'll own property with equity.

Stable Payments
Rent payments can rise with every new lease you sign. A fixed-rate mortgage offers stability.

Creative Freedom
A rental property is not yours to change as you please. But when you buy a house, you have the freedom to turn it into your dream home.

When deciding to buy or rent, carefully examine your budget, and think about your lifestyle and goals. If you're considering buying but are apprehensive about the current market, a real estate professional can help you understand what's happening in your community.