The perks of buying over renting

Debating whether to rent or buy right now? You’re not alone. Searches on the topic have risen dramatically in the past year or two, as people try to guess what the housing market has in store. 

Countless studies have shown that homeownership offers many benefits, both financial and emotional, that renting cannot match. From building equity and enjoying tax incentives to feeling a sense of stability, the perks of owning a home are wide-ranging. 

However, current home shoppers are faced with high housing prices around the country, as well as record-high rents; according to NerdWallet, rent prices are nearly 34 percent higher than they were before the pandemic. It’s a tough decision, and a very personal one. In this blog, we’ve gathered advice from the experts to help make the best choice for you and your family. 

Financial benefit: Owning is cheaper than renting in the long term

The chart above, from the National Association of Realtors, shows a cost comparison between a renter and a homeowner over a seven-year period. Factoring in annual rent increases of 5 percent, the chart shows that the homeowner's payment is lower than the rental payment after 6 years. Add in the tax savings of homeownership, and the homeowner's payment is less than the rental payment after 3 years.

Financial benefit: Stable monthly payments

CNN says, “A homebuyer who obtained a 30-year fixed-rate mortgage today and lived in that home for three decades would still have the same monthly mortgage payment in 2054. By contrast, renters generally face the specter of having their monthly rent rise steadily—and sometimes dramatically—from one year to the next.” 

Emotional benefit: Psychological and mental wellbeing

HousingWire says, “While the financial benefits of purchasing your own home are solid, the ones outside the realm of money often give us the most satisfaction. During a time when it feels like we can control very little around us, being able to create a sense of stability can be indispensable. Owning a home provides you with a space that’s truly yours. It instills a sense of pride, and may allow you to become more connected to your community.”

Financial benefit: Building equity

Keeping Current Matters says, “If you’re still making your decision on whether to rent or buy, you may wonder if you missed the boat. But buying a home can be a great way to grow your net worth, since home values have a tendency to rise over time. The average homeowner’s net worth is almost 40X greater than a renter’s.” MoneyGeek describes homeownership as “a forced savings account. You pay your mortgage every month, but ultimately the cash comes back to you in the form of equity as the market value of your home appreciates over time.” 

Financial benefit: Tax breaks

CBNC says, “Homeowners have access to generous tax breaks… Owning a home can help you build wealth but it also comes with expenses like mortgage payments, maintenance costs, and property taxes. Fortunately, some of these costs are deductible and can shave thousands off your taxable income.”

Emotional benefit: Feeling of community

A research series by Habitat for Humanity on the social engagement of homeownership showed that feelings of stability among homeowners were related to improved satisfaction in life, increased civic participation, and better physical and mental health. Looking at owners vs. renters, the study showed that homeowners have more opportunities to build social engagement, which strengthens their motivation to improve their neighborhood and make it a great place to live.

Financial & emotional benefit: Freedom to personalize 

Many real estate experts tout the benefits of home personalization, including customized spaces that enhance your comfort and wellbeing, optimizing your home for specific needs and routines. Plus, according to homebuilders, such tailored features can actually increase your home’s resale value!

Financial & emotional benefit: Sense of stability

RBFCU says, “Homeownership can offer stability for you and your family. As your housing costs stabilize, you can begin saving more money for retirement, travel, education funds, medical needs, and emergencies. You’ll also give up wondering when the next rent hike will hit—or if your landlord will decide not to renew your lease. As a homeowner, you can stay for as long as you wish.” 

Thinking about buying a new home in Oregon? See homes for sale, come by for a visit, or sneak a peek at what’s in store for the future.