Before the housing market crisis, many people for years viewed buying a home as a measure of financial success. Today homeownership has a very conflicting perception, with almost half millennials beginning marriage and families almost a decade longer than previous generations. This generation has delayed its process for buying a home due to financial troubles, lifestyle changes and loads of debt. Whether you agree or disagree, with buying or renting a home it is important to compare both sides of each argument.
Why Buying Might Be Better Than Renting
You can eliminate the expense of housing once you pay off your home it is yours. Even if the home appreciates more than you have paid in mortgage and interest, you can break even or earn a return. Some people believe that buying home can be a bad financial move, but with buying a home you pay for things you don’t have to pay for as a renter. Such as, property taxes, insurance, and maintenance costs. Before purchasing a home it is important to weigh the costs associated with buying a home and analyze the housing market to see if it is the right time to be buying. Some things to keep in mind like: The longer you live in the home the better, because the costs are spread out over time. If you are overwhelm with the rental costs in your area, it might be more affordable to buy a home at that time. Even if you plan on purchasing a home, find an affordable home that you can make profit on. Many people make the mistake of purchasing a home that is either out of their budget or requires renovation, which can be an unexpected cost. However, with buying a home you are building equity whereas with renting you are just losing more money than you think.
Today more people are renting than buying homes then they were in the past 50 years. This is due to the fact that housing prices are high and large amounts of student debt are lingering over millennial homebuyers. However, renters may not be making the best decision for their long term benefit. In almost every U.S. major market it is cheaper to purchase home then it is to rent over a decade even with housing prices rising recently. Most people assume that a buying a home is a huge investment, but their incomes are likely to rise overtime then a housing payment will not seem as big in the future. The toughest time buying a home is in those first few years. Then those costs will start to shrink overtime. Although renting is the trend, the future could look different.
Recently, there has been an upward trend in the economy with the unemployment rate being low and a large group of anxious millennials wanting to move out of their cram apartments. However, this generation may still face some headwinds with homeownership. Last year home prices exceeded rent making homeownership more difficult to achieve. Then this year there has been a shortage in homes making it increasingly difficult for this generation to find a home that best suits their needs. In conclusion it is unfeasible to say that renting or buying is a better decision. Because everyone has different factors and reasons, and it also depends on their unique situation.