With rents rising, does it make more sense to buy a home now? With rents rising fast, renting a home may no longer be a more affordable alternative to buying a home now.
According to the most recent rental data from realtor.com, in September 2021, the median rent in the US was up 13.6 percent year-over-year. This is the second month in a row with double-digit increases. This rapid increase in rental prices is more than four times the 3.2 percent rental price growth rate in March 2020, just before the COVID-19 pandemic hit the US.
Rents Rising, Buy Home Now Takeaway
The Takeaway: So, what does this mean for you? As rents continue to increase—and rental properties become less affordable—buying a home may not only be a better long-term investment, but in some cases, a less expensive alternative.
Remember, a home gains value (equity) over time. So if you sell later, chances are you will end up with a significant amount of money in your pocket that a rental will not give you. We’ve had instances where clients purchased property for less than $50,000 many years ago in NY. Now such properties can sell well over a million. Also, keep in mind that this is equity that can be accessed via bank loans in instances where you may need a bit of financial help.
Conclusion: With Rents Rising, Does It Make More Sense to Buy a Home Now?
So if you’ve been thinking about making the transition from renter to homeowner? Now could be a great time to make a move, especially with the stellar interest rates we have (which saves you tens thousands over the life of the loan) and the massive equity gains (property value increases) that we are experiencing due to this never before seen seller’s market.
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By Hugo Rivera, Realtor ®
International Best Selling Author
Broker: Robert Slack LLC
3220 SW 31st Rd, #201
Ocala, FL 34474