If you read this article, you are already thinking about owning your own home! Well, let’s try to answer the question honestly — should I buy or rent a house in 2023?
Buying a house — benefits
- Helps build equity
- More stability, permanent residence
- Possible tax incentives
- Independence from the owner — can make repairs, redevelop or improve the house to your liking
Buying a house — disadvantages
- Requires financial investments and a large number of documents
- You can lose money if the value of your home falls
- Additional expenses other than mortgage payments
- You are solely responsible for repairs and troubleshooting.
Rent — benefits
- Less paperwork
- Freedom and mobility — you can often move or travel
- No worries about falling home value
- Positive effect on credit score (if the host reports your payments to the credit bureaus)
- Don’t pay property taxes
Rent — disadvantages
- The landlord can raise the rent
- Lack of stability
- There is always the possibility of an emergency move if the owner decides to sell the house.
- No tax breaks
- Pay someone else’s mortgage, not yours
- You can not make repairs or interior design to your taste
What do the statistics say?
The numbers will show the moods in American society and people’s daily decisions — should I buy or rent a house in 2023?
According to a survey from Clever, renting is still the cheaper option in 45 of the 50 US metropolitan areas. But, of course, this fact will not impress lovers of quiet suburbs or small towns.
From 2016 to 2023, house price increases outpaced rents by 70%. And the average price of a house rose to 371,000 from 217,000. In the same period, housing prices rose by 73% in large cities and rent by 45%.
In 2023, renters saved an average of $872 per month compared to those who paid off mortgages in the top 50 metropolitan areas.
Let’s go over the main differences between owning and renting a home so you can make the right decision. And answer the question — should I buy or rent a house in 2023?
Expenses for rent and owning a house
If you are renting, you will most likely need a deposit (payment for the first and last month) to protect the landlord from damage. Also, ask the landlord if your monthly fee includes utilities. Discover how the security deposit will be held and if it will accrue interest.
If you’ve bought a home, your most significant monthly expense is the mortgage payment. Be aware that in some cases, it may increase or decrease due to changes in property taxes or insurance premiums. Consider monthly homeowner association fees if your home belongs to one. Also, it is better always to have money for unforeseen expenses — breakdown or repair.
Today, housing is primarily an investment. And this is one of the main points that people who rent real estate are deprived of. Homebuyers, in turn, can benefit from capital that accumulates over time. For example, if a house has risen in value, you will earn by selling it.
Also, if you choose a fixed-rate mortgage, you won’t have to worry about sudden payment changes, as happens when renting a house. In many cities, buying can be as affordable as renting — capitalizing on your property will make more sense than just renting.
If you detail payments, you can reduce your tax liability and deduct mortgage interest. Taxes may depend on where you live and the value of the home. However, this point should not be decisive — after all, for many people, it is cheaper to rent than to own.
If something breaks in the rental housing, the owner fixes it. And if you are in your own house — all the responsibility lies with you. On the other hand, as a homeowner, you have more control over the quality of appliances or repairs.
To reduce possible costs, you need to carefully study the information provided by the seller and conduct an inspection of the house.
Should I buy or rent a house in 2023? Ask yourself some critical questions
- Do you want to have a long-term investment?
- How long would you like to live in one place?
- Are you planning to have a family and children?
- Do you want stability or flexibility?
- What are your career and financial goals?
- Are you ready to move to buy more affordable housing?
Buying or renting is a matter that largely depends on your lifestyle or desires. Believe us; nothing can stop you if you are considering purchasing a home! At LBC Mortgage, we have been dealing with mortgages for 15 years and have seen from our experience that you can find financing for any situation.