Renters account for nearly 35% of all households in the United States. This number has increased steadily over the past seven years. Much of this has to do with increased mortgage guidelines but the supply of rental properties has also contributed to this number. Renting is a viable option in the right situation but now is currently a great time to buy. Not only are interest rates still hovering around 4% but home prices are still considered affordable in many markets. If you are fence whether or not to explore the housing market here are a few reasons why it may be time to stop renting.
Monthly payments. In the past renting was viewed as a less expensive alternative to buying. While this still may be the case in same areas it is no longer the slam dunk it used to be. With the increase in rental demand landlords have slowly pushed rental prices higher while interest rates have gone lower. With home prices still below average your monthly payment may actually be lower as the homeowner than as a renter.
Tax incentives. While your tax returns may not be a main consideration they are certainly a benefit as a homeowner. The ability to write off the interest and depreciation can equal thousands of dollars in your pocket at tax time. You can view this increase as a method of forced savings. As long as you own the property your tax returns will be forever altered.
Alterations. Even the best landlords will not let you do whatever you like to their property. If you have a desire to paint your walls a different color or do things with the exterior it may be time to make a move. As a homeowner you are in control of everything that goes on with the property. You may not like to shovel or cut the grass but you can also stain your deck any color you please and plant any flower you like without getting your landlords approval first.
Equity. Real estate makes a great investment. With home prices still below average there is room for values to rise. Equity shouldn’t be your main reason for buying but it is certainly an added plus. At some point five, ten or twenty years from now your home value may rise and you could be sitting on a pretty nice nest egg. Increased equity will also give you options for a second mortgage or the ability to refinance in the future.
Fixed payment. As a renter you are subject to periodic rent hikes from your landlord. With a 30 year fixed mortgage you have the comfort of knowing what you are going to pay every month. Your taxes and insurance may fluctuate slightly from year to year but it won’t take wild swings. Knowing your fixed monthly payment will allow you to budget and make long term savings plans.
Now is a great time to take a look at home ownership. You never know when the rental or housing market will change without warning. When it does it may be too late to take advantage.