Renting vs. buying

Buying a home vs. rentingTurning the key in a lock that no landlord has access to, reading in a hammock in your own backyard, or painting your dining room bright red – what could be more exciting than making the leap from renter to first-time homeowner?

Making the decision to buy a home instead of renting is a difficult one. Looking at the projections of home prices and mortgage rates, housing experts predict that it is smarter to buy now at current interest rates.

Using the example on Keeping Current Matters, if you buy a $250,000 home today at 4.17% interest, you’ll pay $1,218.17 per month. If you wait until next year to buy, that same home will cost an estimated $260,000, and the interest rate will rise to 4.8%, increasing the payment by $145.42 to $1,364.13.

Date Mortgage Interest Rate* Principal & Interest Payment
July 2014 $250,000 4.17% $1,218.17
July 2015 $260,000 4.80% $1,364.13

*Average commitment rate per Freddie Mac

In addition to saving money, homeowners also…

–        Can design and decorate their home the way they want
–        Can start building equity in their home, creating family wealth
–        Don’t have to ask their landlord if they can have a family pet

There are so many reasons why buying a home makes more sense than renting. What are you waiting for?

Marti Reeder, Realtor, Managing Broker