In 2020, home sales rose to their highest levels in nearly 15 years. Record-low interest rates spurred a ton of refinance activity and borrowers started to take advantage of these low rates when buying a home.
However, buying a home isn’t always the right move for some people in certain circumstances. Some people can’t afford a large enough down payment for a home or they’re simply not ready to become a homeowner.
Whatever the case may be, the cost of renting vs. buying a home is a topic that is frequently discussed in the real estate community. This article will dive into the true cost of renting vs. buying and whether or not it makes sense to buy or rent a home in 2022 and in the coming years.
Benefits of renting
While renting often gets a bad reputation, there’s no denying there are times when it makes more sense to rent than buy a home.
Some of the benefits you’ll get from renting is that you don’t have to deal with maintenance or costly repair bills. If there is an issue with your utilities, most people who rent can call their landlord or maintenance service to come fix the issues.
Another benefit to renting is that you can get up and move quicker than someone who is a homeowner. Some young people may accept a new job in a different city and need to pack up and move at a moment’s notice. Most renters can move rather quickly provided they don’t break the terms of their lease.
Lastly, renters don’t have expenses like real estate taxes and mortgage insurance that most homeowners must pay for each month or every year.
Benefits of buying a home
While renting does come with some benefits, buying a home can be much more beneficial for some people who want to own a home, put down roots, and build equity in an asset that appreciates over time.
One of the top benefits of buying a home is that real estate is generally a great long-term investment. Depending on how long your mortgage term is, property values tend to increase over time. This means that, when it’s time to sell your home, you’ll probably be able to sell it for more than what you bought it for.
Buying a home also comes with stable monthly payments if you choose a fixed interest rate. While a renter’s monthly rent can increase each year, homeowners don’t need to worry about their payments increasing with a mortgage.
Owning a home also gives you a sense of stability and community. New families are able to meet new people and establish friendships with those in their neighborhood and people that live close by.
One way to illustrate the cost of renting vs. buying is to see what the average payment is for a mortgage vs. what an average renter might pay.
Although studies show that first-time homeowners pay $8,600 more on average than renting in their first year, the non-financial benefits of owning a home often outweigh these nominal costs, which is why now is a great time to buy a home.Are you looking to sell or buy a home in Massapequa? The Kim Holland Homes Team is trusted for service and respected for results. Contact us today to find out why now is the best time to buy a home in the Massapequa area.