With housing prices continuing to rise, you may be wondering if it is more affordable to purchase or rent a home. Experts are saying that even amongst the challenges of the last year, it is now more cost effective to purchase a home than to rent one. Let’s take a deeper look at why this is the case with home values and affordability.
According to the 2021 Rental Affordability Report, “Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed.”
Although home prices have increased more than average rents over the last year, studies indicate that owning a home is still more affordable than renting one. Home prices have even risen more than wages in two-thirds of the country. So how is the phenomena of owning a home more affordable than renting even possible in this market?
Home ownership is still possible with interest rates maintaining record-setting lows that effectively counteract the rising home prices. This trend in home prices emphasizes how the cost of renting has been extremely high compared to purchasing a home in this market. High rental prices are so noticeable that declining interest rates heavily impact how it is still in your best interest to pursue home ownership. Amazingly low interest rates are keeping rising home prices in check which benefits the purchasing power of buyers.
With so much uncertainty amongst the global pandemic, home values will be a cause for great gain for those who can afford to buy. If you have the great opportunity to purchase your dream home, you can be confident that you will make a financially-sound decision. Let’s connect today to discuss budgeting options that are in your favor to help acquire an affordable home.