An unprecedented housing boom that left in its wake record-high rental costs and home prices nationwide, is making the decision between renting and buying a tough one for many Americans. Across the 50 largest metro areas in the U.S., the average renter pays about 40% less per month than a first-time homeowner, and in December 2022, it was cheaper to rent than buy in 45 of those metros, CNBC reports.
For some, however, buying a home reaps the most benefits, even as home prices and borrowing costs continue to rise. Long-term equity gains promise the most ROI for Americans stuck on the fence between renting and buying, particularly in a time of record home price appreciation.
“You don’t buy a house based on the price of the house,” [Diana] Olick said. “You buy it based on the monthly payment that’s going to be principal and interest and insurance and property taxes. If that calculation works for you and it’s not that much of your income, perhaps a third of your income, then it’s probably a good bet for you, especially if you expect to stay in that home for more than 10 years. You will build equity in the home over the long term, and renting a house is really just throwing money out.”
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