SHOULD I RENT OR BUY A HOME?

Written by: Jennifer V-E Johnson, Broker/Owner Metro Realty 360

AsarealestateBroker,clientsoftenask if they should rent or buy a home; this questionalwayscomesup,andthereis no correct answer. So, the only advice I can offer is simple, know the facts before you decide to rent or buy a home; do the research and try not to follow what the news, social media, or yourfriendsandfamilythink.

Oftentimes, buyers are hesitant to buy ahomewheninterestratesarehigh.As aresult,manybuyerstendtowaituntil interest rates are lower. The challenge with waiting is that home prices increaseeveryyear,especiallyintheDC Metro Area, where the housing market is more stable than other parts of the country. In addition, your rental payment interest rate is 100%; chances are that rental payment is paying someoneelse’smortgage.

Don’t just think about paying rent today, but rather what your rent could be in 5, 10, or 15 years from now. Rents will continue to go up, and there is no financial benefit. On the other hand, if you have a mortgage, you are building generational wealth for you and your family.

Real Estate has long been one of the safest wealth accumulations. According to NAR (National Association of Realtors), on the national level, if a Homeowner purchased an existing home 10 years ago, there would be a gain of $225,000 in equity if the home were sold at the median sales price in the fall of 2021 for $363,100. Imagine how 25% or more of $225,000 could change you and your family’slife.

Inrecentyears,largecorporationshavebeen buying single-family homes in bulk, driving prices through the roof and making it very difficult for buyers to afford homes. It has become so difficult that Senator Jeff Merkley from Oregon introduced the End Hedge Fund Control of American Homes Act. The Act aims to stop large corporations from monopolizing the residential housing market, allowing more individuals and familiestobuyhomes.

Home ownership allows you to decorate as you please and earn equity which could be used for home improvements, money for private school or college tuition, funding a business,orretirement.

Did you know that a first-time home buyer is considered a person who has not owned a home in the past 3 years? There are firsttime home buyer and down payment programsthatmanybuyersaren’tawareof. For example, low down payment programs arebasedonincomeorprofession.

Formanybuyersowningahomeispossible if you surround yourself with professionals that know the facts. Your first step is to speak with a Loan Officer and licensed real estate agent. The pre-qualification process will provide you with an estimated down payment,mortgagepayment,closingcosts, and other first-time home buyer incentives. There may be additional incentives if you areanactiveMilitarymember,veteran,First Responder, or teacher. Your real estate agentcanprovidepossiblehomesbasedon your pre-qualification letter to see if the homesfitsyourneeds.Ifthehomedoesnot fityourneedsorthemortgageand/ordown payment are too much, at least you will have an idea of how much you will need to savetomakehome-ownershipadream.

Know the facts before you decide; you may be closer to home ownership than you believe!