Rent vs. Own: Breaking Down the Facts
Owning a home carries many benefits that you don't get as a renter. There are plenty of facts and figures that back this notion up.
Starting back in 1988, rents have consistently gone up. The trend is the same but the dollars are different. However, owning a home is a hedge against inflation. With a mortgage, your monthly cost for housing stays the same, unlike rents, which can go up. It also gives you a forced savings account as you get more and more equity over time. Many people like to sweeten this deal even more by selling their house and downsizing when they retire for extra money.
Whether you pay rent or a house payment, you're paying someone's mortgage. Why not make it your own instead of your landlord's? When you pay rent, you don't get any of the financial benefits of the mortgage interest tax deduction or property tax deduction.
"Whether you pay rent or a house payment, you're paying someone's mortgage."
Even though we just had a recession, investing in a home is still a good idea if you have enough time to make it worth your while. Another chart in the video above shows us some more data from before the recession, the first quarter of 2006. The median home price in Salt Lake County was $182,000. Starting in 2012, it started climbing up until today, when our median home price is $270,000. Housing prices go up and down, but historically speaking, housing has been a very good investment.
Finally, the last graphic shows the percentage of income needed to afford a median rent versus what's needed to afford the median home. Basically, this shows that it takes less money on average to buy a home than to rent one.
Finally, there are plenty of non-financial reasons to own a home. In your own home, you can hang pictures or have pets. You can change the home in any way you please, unlike a rental.
If you have any questions for me or you're thinking of buying your first home, give me a call or send me an email. I'd be glad to help.