Maybe you’re renting because you have plans to relocate in the near future (maybe you even have concern that your job could easily enough force you to do so). Maybe you have no interest in dealing with the demands of owning and maintaining a home.
…OR MAYBE, you could be among the countless renters that rent because they THINK they won’t qualify for a home loan or they can’t afford to buy.
If this is YOU, I’d say you may want to run those numbers again as it may just cost you less to own than what you’re now, or soon enough could be, paying for something that will never be yours. Before you decide whether to look for a new house or another apartment, it’s important to understand the true costs of renting in 2022.
Since 1988, rental rates have steadily been on the rise. Expected, sure – but they’re doing so much more aggressively in more recent years.
In 2021, rents grew dramatically. According to ApartmentList.com, since January 2021:
“. . . the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”
That increase in 2021 was far greater than the typical rent increases we’ve seen in recent years. In other words – rents are rising fast. And the 2022 National Housing Forecast from realtor.com projects prices for vacant units will continue to increase this year:
“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth . . .”
That means, if you’re planning to move into a different rental this year, you’ll likely pay far more than you have in years past.
Homeownership Provides an Alternative to Rising Rents
If you’re a renter facing rising rental costs, you might wonder what alternatives you have. If so, homeownership could very well be a solid solution for you as it provides a stable monthly cost you can lock in for the duration of your loan.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
If you’re planning to make a move this year, locking in your monthly housing costs for 15-30 years can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases while building equity in a home you will own. Not only can this added stability benefit you now but the investment of a home purchase will really pay off when you A.) pay off your mortgage and have no payments beyond your taxes and insurance or B.) get to use the equity earned in the home to buy another home.
Either way – you win.
With many buyers still qualifying for interest rates under 4% along with the number of financing options for homebuyers, its worthwhile to connect and see if there isn’t a solution (a really good solution) out there for you. It’s long been said:
Owning a home is a keystone of wealth – both financial affluence and emotional security.
Buying a home truly is one of the greatest investments you’ll ever make and it could very well be right within your reach. Finding out starts with reaching out. Make sure you give me a call or drop me a text or email so we can lock in on getting things moving for you.