If you’re currently renting, you’re likely to face that important decision soon: to renew or to not renew. Is 2023 the year to buy? Purchasing a home can be intimidating, especially if you’ve been renting. But, at some point you need to ask yourself if you ever want to own your own home or if you’re content living in someone else’s space, paying their mortgage. The perfect time to buy may never seem like the perfect time to buy. If you’re waiting on interest rates to go down, you may notice that prices go up. If you’re waiting on prices to go down, you may notice that the inventory is scarce. The rental market may not be as forgiving in 2023, either. Let’s break it down.
According to the Census, rents have been consistently rising since 1988 and rumor has it, they’re not stopping now. The 2023 housing forecast from Realtor.com projects rents to increase by 6.3% this year. Unfortunately, tenants have no control over these increased monthly payments, leaving them with little stability and room to budget and plan. However, the owner of the property is likely locked in with a fixed-rate mortgage. This ensures that they are paying the same amount, each month, for the entire life of the loan. The best part for them? They’re not paying it. Their tenants are.
So, why rent? You may not be in the position to purchase, or you may not be ready to commit to the area. There are also fewer expenses, fewer responsibilities, and more flexibility. The only thing holding you to that property is a lease, which always has an expiration. If you want to move, you can do so as you please. You have very little to manage and typically don’t have to worry about any maintenance issues. At the same time, you’re abiding by a lease. You are keeping someone else’s lights on under their rules.
So, while you’re paying the property owner’s mortgage, they continue to build equity and have complete control over the property. Aside from the sense of ownership, they also have tax benefits. One of the most notable benefits the US Government offers is mortgage interest deduction. This allows homeowners to deduct the interest paid on their mortgage from their taxes as long as they use that money to buy, build, or improve their homes. There are plenty of other tax benefits that encourage people to purchase homes or any other property.
There are so many factors that go into the decision of whether you rent or buy. While renting may seem easier, homeownership is much more rewarding. If you aren’t in the position to purchase but strive to one day, find out what you need to work on to get there. Whether it’s your credit or the down payment that is holding you back, it’s all achievable. The market is ever-changing so don’t allow too much time waiting on the perfect time to buy, either. Get with a real estate professional you trust and let them guide you in the right direction. Until next week!
Eve Leombruno, 2023 MBOR President