But is renting a better alternative? Rents have also soared along with inflation \u2013 and are likely to continue climbing due to a persistent housing shortage.2<\/sup> And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.<\/p>\n\n\n\n So, what\u2019s the better choice for you? There\u2019s a lot to consider when it comes to buying versus renting. Luckily, you don\u2019t have to do it alone. Reach out to schedule a free consultation and we\u2019ll help walk you through your options. You may also find it helpful to ask yourself the following questions:<\/p>\n\n\n\n 1. How long do I plan to stay in the home?<\/strong><\/p>\n\n\n\n You\u2019ll get the most financial benefit from a home purchase if you own the property for at least five years.3<\/sup> If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.<\/p>\n\n\n\n There are costs associated with buying and selling a home, and it may take time for the property\u2019s value to rise enough to offset those expenditures.<\/p>\n\n\n\n Even though housing markets can shift from one year to the next, you\u2019ll typically find that a home\u2019s value will ride out a market\u2019s ups and downs and appreciate with time.4<\/sup> The longer you own a property, the more you are likely to benefit from its appreciation.<\/p>\n\n\n\n Once you\u2019ve found a community that you\u2019d like to stay in for several years, then buying over renting can really pay off. You\u2019ll not only benefit from appreciation, but you\u2019ll also build equity as you pay down your mortgage \u2013 and you\u2019ll have more security and stability overall.<\/p>\n\n\n\n Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow.<\/p>\n\n\n\n 2. Is it a better value to buy or rent in my area?<\/strong><\/p>\n\n\n\n If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.<\/p>\n\n\n\n One helpful tool for evaluating your options is a neighborhood\u2019s price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.5<\/sup> Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.<\/p>\n\n\n\n According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity \u2014 all while maintaining a steady mortgage payment.6<\/sup><\/p>\n\n\n\n In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.7<\/sup><\/p>\n\n\n\n So even if renting seems like a better bargain today, buying could be the better long-term financial play.<\/p>\n\n\n\n Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.<\/p>\n\n\n\n 3. Can I afford to be a homeowner?<\/strong><\/p>\n\n\n\n If you determine that buying a home is the better value, you\u2019ll want to evaluate your financial readiness.<\/p>\n\n\n\n Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that\u2019s a sign you may be better off waiting until you\u2019ve built a larger rainy-day fund.<\/p>\n\n\n\n Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won\u2019t be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.<\/p>\n\n\n\n Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it\u2019s not always the cheaper option.<\/p>\n\n\n\n Plus, even though you\u2019ll be in charge of financing your home\u2019s upkeep if you buy, you\u2019ll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home\u2019s market value.<\/p>\n\n\n\n If you want to buy a home but aren\u2019t sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.<\/p>\n\n\n\n 4. Can I qualify for a mortgage?<\/strong><\/p>\n\n\n\n If you\u2019re prepared to handle the costs of homeownership, you\u2019ll next want to look into how likely you are to get approved for a mortgage.<\/p>\n\n\n\n Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.<\/p>\n\n\n\n For example, lenders like to see evidence that your income is stable and predictable. So if you\u2019re self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren\u2019t at risk of becoming financially overextended.<\/p>\n\n\n\n In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.<\/p>\n\n\n\n Whatever your circumstances, it\u2019s always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you\u2019re interested, and we\u2019ll give you a referral to a loan officer or mortgage broker who can help.<\/p>\n\n\n\n Want to learn more about applying for a mortgage? Reach out to request a copy of our report, \u201c8 Strategies to Secure a Lower Mortgage Rate.\u201d<\/p>\n<\/blockquote>\n\n\n\n 5. How would owning a home change my life?<\/strong><\/p>\n\n\n\n Before you begin the preapproval process, however, it\u2019s important to consider how homeownership would affect your life, aside from the long-term financial gains.<\/p>\n\n\n\n In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you\u2019ve only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.<\/p>\n\n\n\n On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you\u2019re more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.<\/p>\n\n\n\n The great thing about owning a home is that you can generally do what you want with it \u2013 even if that means painting your walls fiesta red one month and eggplant purple the next.<\/p>\n\n\n\n The choice \u2013 like the home \u2013 is all yours.<\/p>\n\n\n\n HAVE MORE QUESTIONS? WE\u2019VE GOT ANSWERS<\/strong><\/p>\n\n\n\n The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don\u2019t hesitate to reach out for a personalized consultation, regardless of where you are in your deliberations. We\u2019d be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.<\/p>\n\n\n\n The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.<\/em><\/p>\n\n\n\n Deciding whether to jump into the housing market or rent instead is rarely an easy decision \u2013 especially if you\u2019re a first-time homebuyer. But in today\u2019s whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership. A real estate boom during the pandemic pushed home prices to an […]<\/p>\n","protected":false},"author":1,"featured_media":1207,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/posts\/1206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/comments?post=1206"}],"version-history":[{"count":1,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/posts\/1206\/revisions"}],"predecessor-version":[{"id":1208,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/posts\/1206\/revisions\/1208"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/media\/1207"}],"wp:attachment":[{"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/media?parent=1206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/categories?post=1206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/loraherring.com\/index.php\/wp-json\/wp\/v2\/tags?post=1206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/myagent.site\/content\/uploads\/2022\/09\/October-2022-MVP-Blog-Post-Image-2.jpg\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/myagent.site\/content\/uploads\/2022\/09\/October-2022-MVP-Blog-Post-Image-3.jpg\")
<\/figure>\n\n\n\n\n
Sources:<\/p>\n\n\n\n\n
https:\/\/www.cnn.com\/2022\/08\/11\/homes\/home-prices-second-quarter\/index.html<\/a><\/li>\n\n\n\n
https:\/\/www.npr.org\/2022\/07\/14\/1109345201\/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l<\/a><\/li>\n\n\n\n
https:\/\/www.bankrate.com\/mortgages\/5-year-real-estate-rule\/<\/a><\/li>\n\n\n\n
https:\/\/fred.stlouisfed.org\/series\/MSPUS<\/a><\/li>\n\n\n\n
https:\/\/www.nar.realtor\/blogs\/economists-outlook\/price-to-rent-ratios-by-state-from-2014-2019<\/a><\/li>\n\n\n\n
https:\/\/www.nar.realtor\/blogs\/economists-outlook\/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years<\/a><\/li>\n\n\n\n
https:\/\/www.statista.com\/statistics\/200223\/median-apartment-rent-in-the-us-since-1980\/<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"