There are many reasons why people choose to rent rather than own a home. Some renters simply like the idea of owning a temporary place as they are still unsure if they want to settle down while others want to avoid the many expenses of ownership.
However, the major downside of renting is that you’re giving money to your landlord every month – money that you’ll never get back.
In contrast, paying for a home mortgage each month may be costly, but it will slowly reduce your home loan balance. If everything goes well, you get to own the house, which is an incredibly valuable asset nowadays.
If you’re deciding if you should continue renting or if now would be the best time to start owning a house, then you’ve come to the right blog. With the way rent continues to increase each year, you might find the latter option better for you.
Rent Prices Continue to Increase
According to a report by Realtor.com, the official website of the National Association of Realtors, the median in the 50 biggest metros was $1,575. The data suggested that rents rose by 8.1% from the previous year, translating to an extra $118 to pay each month for renters.
Realtor.com also revealed that rents for all unit sizes are at an all-time high. Renting for a studio apartment increased by 4% while 1-bedroom and 2-bedroom apartments saw an 8% and 10.2% rise in rent, respectively.
Is Renting Still a Good Idea?
If you aren’t yet sure if you want to settle down, then continuing to rent might be a good idea until you can map out your future a bit more. Many people are still not sure whether they want to move out or stay due to the COVID-19 pandemic so that’s quite understandable.
However, for those who are interested in getting a place they can own, waiting for the lease to expire and looking for a house to buy could be the ideal move. In this way, you can start investing your money toward a valuable asset that will have your name in the title.
To help you decide if now would be a good time to buy a home, you should consider the following questions:
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Do I have the cash to make a down payment?
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Is my credit score acceptable enough to apply for a home loan?
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Do I have any debts and, if so, how much more can I afford?
It’s important to ask yourself these questions if purchasing a house. When you buy a home, you can save money in the long run that would otherwise be used for your rent.
Conclusion
The cost of renting an apartment or house continues to increase every year, which makes it more and more impractical to continue doing so. If you believe that now is the right time to own a house, then you should consider getting a mortgage.
At kstate CREDIT UNION, we can help you get pre-approved for a mortgage so you can know right away if owning a home is right for you. Contact us today by calling or texting us at 785-776-3003 to learn more.