Renting vs. Buying a Home: Buying a House Is More Affordable Than Renting

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Aug 12, 2021 Homebuyer blog

 

Is buying a house more affordable than renting? Almost everyone has probably asked this question. Many people are probably wondering if they’re throwing away their hard-earned money when they are paying for rent instead of applying for a mortgage.

It’s important to note that buying a home is a huge responsibility that requires sound financial decisions. First, you’ll have to come up with a down payment and have your credit score high enough to be approved for a loan. Apart from that, you’ll also have to have enough money per month to pay for monthly payments for several years. That’s why some people probably choose to rent over buying.

Samantha Outlaw of Reach Home Loans, one of Florida’s leading lending agencies, takes a closer look into the real estate market today and tries to settle the question once and for all. Learn the facts and decide for yourself.

Overview of the 2021 Housing Market

One way to determine whether renting or buying is the best option right now is to get a pulse of the housing market today. Just like in 2020, the interest rates are still low. The range of interest rates we are seeing is between 2-3%, which the average is around 2.75%.

“Everything’s still pretty much the same as we left it last year. Mortgage interest rates are still historically low.”

Everyone Is Asking the Same Question

Some people are aware that the interest rates are meager today. These low interest rates have many people asking the same thing. Almost everyone wants to know if they should extend their lease for another year or if they should take the plunge and go ahead with a mortgage. Fortunately, there is an answer to everyone’s question.

“There was a study done by a real estate research company. In the south and Midwest of the US, the majority of counties are actually more affordable to purchase a home than to continue renting… they’re basing the study off of a medium-priced, three-bedroom home.”

It’s Time to Buy Your Home

Some people may not believe it when they’re told that today is an excellent time to buy a home due to house prices going up. However, this gradual yet consistent increase in house prices is due to today’s low interest rates. It’s like these two factors are keeping each other in check. Therefore, the affordability of owning a home today is something that you should be taking advantage of.

“If you look at Palm Beach, Broward, and Miami Dade, specifically, all three counties are more affordable to purchase than to rent. And actually, Tampa and Pinellas County made the list of the top five most affordable.”

Call a Reputable Lending Agency Now

If you are in a position where you’re weighing your options, now is an excellent time to work with a trusted mortgage lender. If you have any questions about your financial situation right now, they can answer your queries and advise you on what you should do. Should you work on getting a higher credit score? Or maybe, save more for a down payment? They’ll break it down for you, so you’ll know if buying a home is the right decision for you.

“A lot of people that are renting are actually spending almost 50% of their income, like their monthly wage on their monthly rent, which is just bizarre. You’re throwing away so much money. At least if you buy, those payments are going towards your own home.”

Wrapping Up

Renting and buying both have their distinct advantages and disadvantages. However, we can’t deny the long-term benefits of buying a home. So instead of paying for a house that will never be yours, buying your own home is ultimately a sound investment. Still, that doesn’t mean you should go all-in on buying a house just yet. Take your time to understand the real estate situation in your area and, if possible, work with professional realtors to advise you every step of the way.

Reach Home Loans has years of experience in mortgage lending and has helped many people purchase their dream homes. Maybe that next person could be you. Call us now at 954-703-1465 to learn more.

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