Renting versus buying might be one of the most discussed topics nowadays, and it has been tough for new generations to become homeowners. But rental prices are also increasing at alarming levels, which means that investing could be the smarter option. According to Trulia, American households in rented properties increased by 36.1% in 2006 and a whopping 41.1% in 2014. Among them, Millennials constituted 71.6% of renters in 2014.
Some of them might start becoming homeowners soon or could be planning to, but is it the right choice? It’s important to know all the facts before jumping into such a decision, as the market might not be in their favor. Let’s find out more!
The Differences Between Renting and Buying
Before making a decision, you have to know the difference between these situations. Living in a rental consists of paying someone else for the right to live in their property. You usually sign a lease, which states the terms and the length of time you’ll be allowed in that place.
One benefit of renting is that you normally don’t have to worry about interest rates or home prices, as your monthly payment is set. Additionally, a security deposit usually takes care of repairs, maintenance, etc.
Meanwhile, buying a house means that you made an investment in a property, normally by taking a loan from the bank which becomes your mortgage. But that house is yours and you’re completely responsible for it.
The benefit is that you get a sense of stability by being the owner of the house. However, having a mortgage could be an issue, and the amount you pay each month could increase depending on the market. However, it might be lower than payments for a rental.
Is It Feasible to Buy a House in 2022?
The question on every person’s mind is whether buying a house is still a good idea in 2022. Interest rates have gone up, which means that owning a house has become very expensive. However, most financiers would say that it is a good investment, especially because rising prices can lead to higher equity for a homeowner.
The disadvantage that keeps people choosing to rent is that the housing market is so in demand in 2022. Buying any property seems almost impossible with so much competition, which ends up driving prices up.
Now that you know all about renting vs. buying, you can start making a decision today. And remember to call Lang Development Group once you’re ready for either, as they can help you in both respects!