The choice whether to rent or buy can be confusing, especially in today’s housing market. Fear of rising interest rates, lack of inventory, even where you want to live can factor into the choice of renting or taking on a mortgage.
It Is Still a Seller’s Market
The overall general market nationwide is expected to remain a seller’s market. This means that it is better to be a seller than a buyer. Less houses on the market equals more competition and higher prices for those few houses on the market.
It All Depends on Your Personal Situation
There are numerous items to consider other than the overall selling price of a home. School districts, local taxes, commute time, amount of time you plan on staying in the home before reselling.
Therefore, a first-time homebuyer who wants to live in an area with low inventory who doesn’t have a large down payment may want to consider using an online tool to help determine whether renting or buying in their specific area.
For example, a $250,000 property in Philadelphia, PA with a $12,500 or 5% down payment at a 5.5% interest rate for 30 years would cost $1,390 per month versus $2,000 per month in rent. Therefore, in 4 years, in this particular situation, buying would save $672 per month and $32,252 in all.
You Still May Want to Buy (and Find a Good Deal)
If you are willing to put in the leg work (or “finger work” on your computer), there are homes on the market that are potentially perfect for your needs. Searching daily on realty sites that list homes currently on the market to become familiar with prices, or even driving around different neighborhoods to get the feel of an area, can help you decide whether or not certain areas are a good fit for you and your family. Some amenities to consider when looking for a neighborhood include:
- Local taxes
- Commute time
- Distance to shopping or dining
- Proximity to public transit
Making a list of the amenities important to you and your family can help you ultimately choose the perfect location and from there, the perfect home. Then, determine what amount you are willing and able to spend for those amenities.