• Marissa McTague

Renting vs. Buying - Is Now the Right Time to Buy A House?

While U.S. home prices continued to climb this past Spring, there are indications that the pace of that growth is beginning to stall. Zillow is forecasting that housing prices nationwide could fall nearly 2% by October, with prices gradually rebounding to stay flat over the next 12 months.

Buying now will also give you an opportunity to lock-in the lowest mortgage rates in history. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 2.88%, down from 2.99% a week ago. Last year, rates were hovering just around 3.75%, meaning you can save thousands by refinancing today. Just how much?

  • Last year, if you bought a $300,000 house with a 30-year fixed-rate of 3.75% last year - the total cost of your mortgage over 30 years is about $500,165.

  • Last week, if you bought a $300,000 house with a 30-year fixed-rate of 2.99% today – the total cost of your mortgage over 30 years is about $454,750.

  • This week, if you bought a $300,000 house with a 30-year fixed-rate of 2.88% today – the total cost of your mortgage over 30 years is about $448,373.

You'd save $6,377 just from this week's rate drop alone!

But What About Rent Prices?

As mortgage rates continue to reach record-lows, has your rent stayed the same?

New data shows that the median price of homes currently listed in the United States is $282,000, while the median monthly rent price in the United States is $1,650. If you paid $1,650 in rent each month over a 5 year period, you'd be paying $99,000 out of pocket

Buying a home instead of renting can save you $30,000 over 5 years.

The chart below shows how the money you spend on renting would serve you better by buying a home instead.

If you rent an apartment, condo, or house, you’re essentially paying your landlord’s mortgage payments throughout the year. Over the span of 5 years, you’re losing out on thousands of dollars in benefits that homebuyers receive.

Why not put that money towards your own property and net worth instead?

Reasons You Should Consider Ending Your Lease

Besides the monthly savings, there are plenty of reason to ditch your lease and buy your first home!

  • Tax Benefits

  • As an owner, you can deduct from your taxes the federal and state earnings of the amount you pay annually for mortgage interest and real estate taxes if you itemize deductions.

  • Homeowner Once, Homeowner Forever

  • You’ll enjoy the satisfaction and pride of owning a home so much that your first home often leads to selling and purchasing a higher valued second home.

  • Savings For Retirement

  • Owning a long-term home can provide a beneficial security during retirement, as it increases your net worth.

  • Your Home, Your Style

  • Renters have difficulty customizing an apartment, but owners can modify their home to adapt to their personal needs and style.

  • Increase Your Net Worth

  • The net worth is the part of the property that really belongs to you. Net worth increases when you make your monthly payment, and the value of your home can also increase over time.

If you can afford to put just 3% down as a first time home buyer, are tired of paying your landlord’s mortgage, or are ready to leave your parents’ home after months of quarantine - talk to a Princeton Mortgage loan originator today by calling 800.635.0977 or visiting princetonmortgage.com to learn more!

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