{"id":6108,"date":"2020-12-13T09:06:53","date_gmt":"2020-12-13T14:06:53","guid":{"rendered":"https:\/\/dankrell.com\/blog\/?p=6108"},"modified":"2020-12-13T09:06:57","modified_gmt":"2020-12-13T14:06:57","slug":"rent-vs-buy-2021","status":"publish","type":"post","link":"https:\/\/dankrell.com\/blog\/2020\/12\/13\/rent-vs-buy-2021\/","title":{"rendered":"Rent vs Buy 2021"},"content":{"rendered":"\n
\"rent<\/a>
Increasing rent<\/figcaption><\/figure><\/div>\n\n\n\n

Thinking of your Rent vs Buy 2021 question? Consider Quarterly Residential Vacancies and Homeownership<\/a> released by the US Census (census.gov) for the third quarter of 2020 is very interesting.\u00a0 First the good news is that the US homeownership rate is the highest it\u2019s been in a decade!\u00a0 The seasonally adjusted US homeownership rate of 68.2 percent recorded in the second quarter 2020, was the highest rate since 2007.\u00a0 In fact, the homeownership rate hasn\u2019t had two consecutive quarters above 67 percent since 2009.\u00a0 As you remember, the homeownership rate progressively dropped through 2015 to hover in the 63 percent range, which was the lowest homeownership rate in several generations. <\/p>\n\n\n\n

\"rent<\/a>
Homeownership rate 1997-2020<\/figcaption><\/figure><\/div>\n\n\n\n

The story of the housing market<\/a> this year has been nothing short of phenomenal.\u00a0 Initially thwarted by a dismal spring market, only to rebound at a record setting pace.\u00a0 Even with historically low existing home sale inventory and rising home prices, eager home buyers are actively pursuing homeownership.\u00a0 <\/p>\n\n\n\n

On\nthe flip side, the second and third quarter US rental vacancy rates are the\nlowest since 2008.  And the mean US\nrental asking rent of $1,600 marks a high point as rents continue to creep\nhigher.  Of course, homeownership rates\nand rental vacancies will vary significantly depending on the region and\nlocality.  However, looking at the US averages\nis a good benchmark to see trends develop.<\/p>\n\n\n\n

For many, comparing increasing rent versus a low interest mortgage rates makes buying a home the answer to the rent vs buy 2021 question.\u00a0 A November 8, 2012 article from Realtor Magazine (Rising Rents Press More Americans to Make Big Decision<\/a><\/em>; magazine.realtor) describes the renter\u2019s plight, by saying, \u201cRental price expectations continue to rise and are much higher than home price expectations\u2026<\/em>\u201d This sentiment continues to hold true.\u00a0 Besides escaping rising rents, many home buyers are drawn to the touted benefits of homeownership, including increased well-being and wealth-building.<\/p>\n\n\n\n

How do you know if renting or buying is better?\u00a0 First, when deciding on the rent vs buy 2021 question, there are many other considerations besides rising rents.\u00a0 Consider how long you intend to live in the area.\u00a0 Renting is often the housing solution if you think your residence in the area is temporary.\u00a0 <\/p>\n\n\n\n

Next, if you don\u2019t already have one, create a housing budget<\/a>.\u00a0 Besides deciding on how much rent you can afford, talk to a mortgage lender to get prequalified to further help you understand how much you can afford to pay for mortgage or rent.\u00a0 <\/p>\n\n\n\n

Once\nyou have a budget of what you can afford, create an estimated renter\u2019s and home\nowner\u2019s budget to compare.  Besides the\nbasic housing payment (rent or mortgage), there are other items that need to be\ntaken into account and can vary depending if you rent or own.  These other items include (but not limited\nto) monthly utilities, insurance, and maintenance.  To help with estimating the \u201cextras,\u201d start\nby asking the landlord and\/or home seller for twelve months of utility bills\n(Montgomery County MD requires home sellers to provide this for owner-occupied\nhomes).  Ask your insurance agent for a\nquote to compare renters\u2019 vs homeowners\u2019 insurance.  <\/p>\n\n\n\n

Home maintenance is usually forgotten and not budgeted.\u00a0 Tenants typically have minimal maintenance, which is an attraction to renting.\u00a0 Generally, home maintenance for owners usually includes having seasonal or annual inspections on the home\u2019s systems (e.g., HVAC, roof, etc).\u00a0 Additionally, you have to budget to repair and\/or replace systems as they age.\u00a0 <\/p>\n\n\n\n

By Dan Krell
Copyright \u00a9 2020<\/p>\n\n\n\n

Original located at https:\/\/dankrell.com\/blog\/2020\/12\/13\/rent-vs-buy-2021\/<\/p>\n\n\n\n

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Disclaimer<\/a>.\n This article is not intended to provide nor should it be relied upon \n for legal and financial advice. Readers should not rely solely on the \n information contained herein, as it does not purport to be \ncomprehensive or render specific advice. Readers should consult with \nan attorney regarding local real estate laws and customs as they vary \nby state and jurisdiction. Using this article without permission is a \nviolation of copyright laws.<\/p>\n","protected":false},"excerpt":{"rendered":"

Thinking of your Rent vs Buy 2021 question? Consider Quarterly Residential Vacancies and Homeownership released by the US Census (census.gov) for the third quarter of 2020 is very interesting.\u00a0 First the good news is that the US homeownership rate is the highest it\u2019s been in a decade!\u00a0 The seasonally adjusted US homeownership rate of 68.2 … <\/p>\n

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