As home prices rise across the U.S., choosing to rent has become increasingly popular. New analysis by realtor.com® reveals the monthly costs of buying a home have risen by 14 percent over the past year. This is more than three times the 4 percent increase in monthly rental costs. Additionally, this analysis found that the number of places where it is cheaper to buy has significantly declined in the past year.
Is it better to rent then? It depends… Looking at the short view, renting for a couple of months or years may make sense but taking a looking view changes the picture entirely.
According to Realtor.com since home ownership has historically been an important source of household wealth creation, it could be problematic if this trend continues for too long. Still, even in places where renting is currently more affordable, rising home prices provide wealth building opportunity for home buyers.”
The take away should be this;
Homeowner costs have continued to rise and the price of entry into home ownership is becoming steeper in the Washington DC, Maryland and Virginia. If you plan on buying 1, 2 or 3 years from now, start saving for a home now. Homeownership still makes economic sense over a long term.