The housing market has shown incredible resilience and has been completely on fire for most of this year. One of the reasons housing has demonstrated a strong recovery since the pandemic lockdown is the number of renters that became homebuyers. Many decided that their housing needs had changed as a result of the pandemic while others decided it would be a great time to take advantage of record low interest rates.

While the timeline on when to buy a home is different for everyone as everyones situation and circumstances are different, homeownership rates are going up and more renters are asking the question; Should I continue renting or is it time for me to buy? The answer will depend on your current situation and future plans, but here are 6 factors to consider to help you in deciding if you’re ready to own a home of your own.

1) Rents Will Continue to Rise

One of the main reasons renters decide to become homeowners is because rents continue to rise year over year. The median rent has been rising continuously since 1988 and the pace of the increase has been accelerating. This was detailed recently in a report issued by the U.S. Census Bureau and shown on the graph below; When you buy a home, you are able to lock in your monthly payment for the life of the loan creating consistency and predictability in your monthly housing payment.

2) The Freedom to Customize

This will matter more to some than others, but many renters reach a point where they want to be able to do more to make the place their own. New paint, flooring, light fixtures and other such upgrades are off limits. When renting, landlords will make those decisions and you usually don’t have much say in what the selections are or when they happen. When you own a place of your own you have the freedom to decorate and personalize to make the home truly your own.

3) Privacy

For some renters, this has become a bigger issue given the current health concerns. Depending upon the terms of your lease your landlord can enter your property to conduct routine inspections and take care of maintenance issues with short notice. As a homeowner, you’re the one to decide who can enter your property.

4) Greater Flexibility

One of the biggest perceived advantages of renting is the flexibility it can offer in terms of relocation. The fact that you aren’t “tied down” can lead to a sense of freedom. That isn’t always the case if you are two months into a 12-month lease and suddenly get a job transfer. You will have to negotiate to break the lease with your landlord. Additionally, if the landlord decides to raise your rent at the end of the lease you may be forced into an unwanted move. As a homeowner, you would need to sell your home in the relocation scenario, but do have an element of control over the process. In today’s housing market with low inventory, it would probably not be an issue as homes are selling at a record-breaking pace.

5) Building Equity

Many renters don’t want to buy as they don’t want to commit to paying a mortgage. What isn’t realized is when you pay rent you are paying a mortgage, the question becomes is it yours or your landlords? With rent payments, all of the equity gains go to your landlord. If you own a home then the benefits of your investment go to building your net worth. The money built up in equity can be used at a later date to send children to college, start a new business, buy a bigger home, or simply save for retirement.

6) Tax Advantages

Owning a home can create additional advantages that work in your favor. Although tax laws have changed and everyone’s situation will be different, payments for property taxes and mortgage interest are often deductible from your income. When you rent, the tax benefits are enjoyed by your landlord.

Bottom Line

Everyone’s situation is different and the decision on whether it’s better for you to rent or buy is entirely based on your unique circumstances. If you’d like to discuss your situation in more detail to learn more about all the options available to you, without any pressure or obligation, please feel free to Book a Call with me.