It’s not easy to choose where you live, though it usually comes down to two options: buying a house or renting one. Because the economy has improved, though not enough to be considered prosperous, many people stick with renting a house instead of buying one. However, this isn’t a permanent solution. Eventually, you’ll want a place to call home. For reasons such as this, it’s arguably better to buy a house instead of rent one.
Cheaper but Lackluster
When you’re unhappy with your current living situation, it is time to move out. So what do you do? Take out a loan to buy a house or rent one? Many people chose the latter because former Trulia economist Jed Kolko says, “buying ends up costing more than renting” especially in “costly parts of the country” like California and Florida (1). For those who live here, buying a house is very difficult. But if you’re somewhere with reasonably priced housing, then loans like the Federal Housing Administration loan are easier to obtain. Yet experts like Pat Esswein say, “now is a good time to buy” as “most cities in the U.S. have recovered from the housing market bust that began in mid 2006” (1).
Bigger and Better
Because the cost of rent is rising, the prospect of buying a house seems more stable by comparison. For instance, if you purchase a house with something like a fixed-rate mortgage “your mortgage payment can never change” (SlideShare 1). In other words, you can keep paying the same amount rather than dealing with increasingly higher payments. Plus studies show “home ownership tends to lead to better education…and an increase in community involvement” (Daily News 1) because the environment provided by a house that’s owned is more positive.
A Place to Call Home
With significant improvements on the housing market, there are more opportunities to buy houses for reasonable prices. Apart from the Federal Housing Administration loan or a fixed-rate mortgage, you can also get a private loan with a 10% down payment (Kolko 1) meaning you can pay less money upfront but with higher monthly payments afterward. Another benefit to buying a house is the prospect of tax deductibles on things like mortgage interest and property. When a homeowner does this, he or she can save money. Therefore, the choice of renting versus buying isn’t that different when it comes to pricing. But whereas buying a house has more long-term prospects, renting does not.
Daily Real Estate News. “Rent vs. Buy: How to Overcome Buyer Concerns.” National Association of Realtors, 12 April 2015, http://realtormag.realtor.org/daily-news/2015/04/13/rent-vs-buy-how-overcome-buyer-concerns. Accessed 14 February 2017.
– – -. “Rising Rental Costs Strike More Households.” National Association of Realtors, 30 July 2015, http://realtormag.realtor.org/daily-news/2015/07/31/rising-rental-costs-strike-more-households. Accessed 16 February 2017.
Esswein, Pat Mertz. “Buy or Rent?” Kiplinger, January 2015, http://www.kiplinger.com/article/real-estate/T010-C000-S002-better-to-buy-or-rent.html. Accessed 14 February 2017.
Kolko, Jed and Trulia. “When You’re Better Off Renting A Home Than Buying One.” Money, 17 October 2014, http://time.com/money/3513854/when-youre-better-off-renting-a-home-than-buying-one/?iid=sr-link1. Accessed 14 February 2017.
SlideShare. “Top 5 Reasons To Buy vs. Rent.” Zillow, 2006-2017, http://www.zillow.com/mortgage-learning/buying-vs-renting/. Accessed 14 February 2017.