Should You Rent or Buy? Breaking Down the Numbers This Holiday Season
Rental prices have fallen for the 15th consecutive month, making it tempting to think renting is more thoughtful than buying. But when it comes to deciding, it’s not that simple.
According to the Realtor.com® October 2024 Rental Report, renting is more affordable than buying in all 50 major metro areas. The median asking rent is $1,720, down $23 from last month and $40 from its August 2022 peak. Meanwhile, the median home listing price of $425,950 means an estimated monthly mortgage payment of $2,229 (assuming a 20% down payment and a 6.93% interest rate). That’s around 30% more than the median rental price—before property taxes and insurance are factored in.
But does that mean renting is always the better financial move? Not necessarily. Here’s a closer look at the pros and cons of renting and buying to help you make the best decision.
Why You Might Rent
Renting offers flexibility and freedom, making it a practical choice for certain lifestyles or circumstances:
1️⃣ No Maintenance Hassles:
Home maintenance and repairs can cost homeowners between 1% and 4% of their home’s value annually. As a renter, those costs (and the time involved) are your landlord’s responsibility.
2️⃣ Easier Mobility:
Renting gives you the flexibility to relocate more easily. Whether for work, family, or lifestyle changes, renters can often move quickly without selling a property.
3️⃣ Lower Upfront Costs:
Renting doesn’t require a hefty down payment or closing costs, making it more accessible for many people in the short term.
However, renting also means missing out on equity building and the stability of owning a home. Renters are also at the mercy of landlords who may raise rents or sell properties, leaving them with less control over their living situation.
Why You Should Buy
Owning a home has its own set of compelling advantages that go beyond financial considerations:
1️⃣ Build Equity and Wealth:
When you pay a mortgage, you’re investing in your future. Each payment increases your ownership stake in the property, contributing to long-term wealth.
2️⃣ Fixed Payments for Stability:
With a fixed-rate mortgage, your payments stay consistent for 15–30 years, offering peace of mind compared to the possibility of annual rent increases.
3️⃣ Potential for Refinancing:
Current interest rates may be higher than in recent years (hovering around 6.93% to 7.05%), but refinancing when rates drop could make homeownership even more affordable.
4️⃣ A Place to Call Your Own:
Ownership brings control—whether personalizing your space or knowing your living situation isn’t dependent on a landlord’s decisions.
Buying comes with challenges, like a sizable down payment (the median is currently $30,300) and ongoing maintenance costs.
Should You Wait or Act Now?
If you’re debating whether to wait to buy, consider this: Serious buyers and sellers are in the market during the holiday season. With fewer homes on the market, your property could stand out in less competitive conditions.
As a real estate consultant, Graham Hill explains, “Deals that might not seem ideal now could become more profitable as prices rise and refinancing opportunities improve in the future.”
Renting vs. Buying: City-by-City Breakdown
Let’s explore a few examples of where renting vs. buying stands in today’s market. Using the current 6.93% interest rate and assuming a 20% down payment:
Most Expensive Rental Markets
San Jose, CA: Median monthly rent is $3,333; buying costs 119.8% more.
Boston, MA: The median monthly rent is $2,944; buying costs $ 50.34% more.
Los Angeles, CA: Median monthly rent is $2,848; buying costs 113.41% more.
Least Expensive Rental Markets
– Oklahoma City, OK Median monthly rent is $1,021; buying costs 13.82% more.
– Cleveland, OH: Median monthly rent is $1,222; buying costs 8.1% more.
– Louisville, KY: Median monthly rent is $1,249; buying costs 8.1% more.
Final Thoughts: Is Now the Right Time to Buy?
The decision to rent or buy depends on your financial situation, lifestyle, and long-term goals. Jiayi Xu, Realtor.com’s economist, recommends staying informed about market trends and carefully considering how long you plan to stay in your next home.
Tools like the Realtor.com Rent vs. Buy Calculator can provide personalized insights to help you decide, weighing short-term savings against long-term equity growth.
Whether You Rent or Buy, Know Your Market
The right move for you isn’t just about the numbers but your future. If you’re ready to explore your options, let’s connect and create a plan that works for you, whether renting, buying, or preparing to make your next big move.
🔑 Take the next step confidently. Reach out today!
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