When the considerable costs of buying, analyze narrow down the price of monthly payments rather than focus on the total cost. “You don’t buy a house based on the price of the house. You buy it based on the monthly payment that’s going to be principal and interest and insurance and property taxes,” Olick explained. “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.” Mortgages offer 30-year fixed rates, eliminating the possibility of rising, unaffordable payments. While rentals consistently run the risk of price increases. Plus, you actually earn equity with home ownership.
The dream of home ownership is still worth the cost for many Americans. A Bankrate 2022 survey found that 74% of its respondents said buying a home was the most significant accomplishment they could have. Many are also buying houses to rent out at mortgage prices, letting their homes pay for themselves as they rent elsewhere for lower monthly costs. “As the market kind of bubbled in certain parts of the country and other parts of the country are priced out, we’ve seen a lot of investors coming in looking for affordable homes that they can buy and rent,” said Michael Azzam, real estate agent at The Azzam Group (via CNBC). “Prices have still continued to appreciate even with interest rates where they’re at. And so, we’re still seeing a pretty active market here.”