New year, old question: Is the time ripe to finally buy a house? The interest rates are still close to historic lows, and the home prices are still rising. Perhaps, 2018 may be the last great year for America’s current real estate boom before the industry slowly turns cold.
If you have been renting for years and want to gain a foothold in the hot real estate market, home ownership is definitely on your mind. But is your unique situation suitable for buying over renting? Ask yourself these important questions:
Are You Renting a 3-Bedroom Apartment?
According to the 2018 Rental Affordability Report from ATTOM Data Solutions, it’s financially sensible to buy than continue renting. In 447 counties in America, the median-priced home costs less than the rent of a three-bedroom apartment in 240 of them.
Then again, you’re only going to save you if you’re currently renting a three-bedroom apartment. If you’re not, loaning to buy a single-detached, three-bedroom house won’t lower your monthly expenses.
Where Do You Live?
Of course, the location is a factor. Buying may be more affordable than renting in most markets, but that depends on where you actually live. The study reveals that most major metros, as well as their nearby areas, favorably slant toward renting.
Fortunately, there are notable exceptions. Any mortgage company in South Jordan could argue that buying is better than renting in Utah since the state’s real estate scene is red hot. In fact, the demand has been outpacing the supply. Other notable markets are Dallas, St. Louis, and Indianapolis.
What’s Your Goal?
Assess your priorities and be honest with yourself. If you want to purchase a property to make room for a growing family, then it’s a great decision. If you’re afraid to miss out, then the risks of buying might not be worth taking.
Compared with renting a property, buying a house comes with intangible benefits you can’t quantify. At the end of the day, it’s best to take out a mortgage when you’re ready to assume a major financial obligation for many years.