Is It Really Better To Rent Than To Own a Home Right Now?
Recent news headlines may have stated that renting is preferable to buying a home at the moment. But you should know how these statements are supported before letting it influence your choices.
These reports frequently include assumptions that are unrealistic for the typical home. For instance, one of those papers' methods claims that renting is the better financial choice because it allows for other investment opportunities. It is predicated that renters will invest the money they would spend on expenses associated with home ownership.
But here's the thing - most individuals who rent aren't making those investments. The BH&J National Price-to-Rent Index co-author Ken Johnson explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
Due to the wealth, it enables you to accumulate, homeownership is one of the best investments you can make. Because of this, the average homeowner and the average renter have significantly different net worths (see graph below):
So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.
If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.