Here’s the math as to why it’s better to buy a home than rent one.

Have you heard someone say they’re frustrated with the current real estate market, they aren’t going to pay more than asking price for a home, and they’re just going to rent for a couple of years? Today we’re discussing the math of renting versus owning. 

Many properties these days are actually priced under market value to spark multiple offers. They hope to receive an offer well over asking price, even though it still may end up at market value. Today’s typical rent is about $1750 per month, which equals $21,000 per year. That’s a huge amount of money that you could have paid toward principal and interest in your own home, building equity and receiving tax breaks annually. It’s a better plan to offer slightly over asking price when buying a home and get those benefits.

Right now, interest rates are at historic lows, giving you heightened buying power. Renting, even for a year, is just throwing your money away. A local lender shared some numbers with us that may blow your mind: With present interest rates, a $1,750 monthly payment can buy you a $300,000 home, and a $2,200 monthly payment can buy you a $400,000 house. We’ve helped plenty of renters buy homes where their monthly mortgage payment is $500 less per month on average than what they were paying for rent. 

“Every monthly payment made toward your own home will benefit you and not go into your landlord’s pocket.”

Every monthly payment made toward your own home will benefit you and not go into your landlord’s pocket or mortgage. If you haven’t had a chance to save up a 20% down payment, multiple loan options are available. There are options for zero money down, down payment assistance, and conventional loans that start at 3% down. Let us put you in touch with one of our qualified, local lenders so they can see what loan options best fit your needs. 

If you run into anyone in your circle who thinks it’s better to rent, have them call, text, or email us so we can do the math with them and see what makes the most sense. If you have questions about this or any other real estate topic, reach out to us. We would love to help you.