Rather than search for that black-and-white answer, you should navigate this decision based on your individual priorities, which will shift as you enter different stages of life and financial circumstances.<\/p>\n
The net worth of a homeowner is 44 times greater<\/a> than a renter\u2019s. Yet 63% of millennial buyers<\/a> have regrets about their purchase. This isn\u2019t an easy choice.<\/p>\n While online calculators give you a great start on the financial differences between average rents and mortgage payments for your area, we\u2019ll help you sort through the other factors that influence what\u2019s right for this moment in time: your personal and professional goals, leisure and recreation habits, and how you prefer to spend your time and money, to name a few.<\/p>\n Let\u2019s get to it!<\/p>\n \n\n\n\n\n We analyze over 27 million transactions and thousands of reviews to determine which agent is best for you based on your needs. It takes just two minutes to match you with the best real estate agents, who will contact you and guide you through the process.<\/p>\n \n Whether you plan to start a family or add a few pets to the mix, seek more privacy and space, or aren\u2019t sure how long you plan to stay in a particular area, these factors related to your family situation and living preferences should weigh heavily into your decision to rent or buy.<\/p>\n Americans are staying in their houses for a median 13.3 years as of 2018<\/a>. That\u2019s a long span to be in one place if you\u2019re anxious to move around. However, if you have no intention to leave your current location and would like to take steps to settle there, then you stand to reap a number of benefits:<\/p>\n As you\u2019d expect, people tend to buy homes<\/a> as they get older, build up some capital, and make the decision to get married and start a family.<\/p>\n When you plan to add kids or pets to the equation (or perhaps relatives who\u2019d like to move in with you in the future or parents who\u2019ll need your help), you\u2019ll value the extra space and privacy a single-family home can offer.<\/p>\n The average apartment size is around 934 square feet, compared to nearly 2,700 square feet<\/a> for newly built single-family homes. These are some key reasons why you see more Americans owning than renting across all age groups except for 20-somethings<\/a>.<\/p>\n Single women accounted for sizable 18% of recent buyers<\/a>, according to the National Association of Realtors 2019 Profile of Homebuyers and Sellers. Their primary motivator? Simply having a space to call their own.<\/p>\n When you\u2019re a renter, you sign a contract and put down a deposit, which both limit your ability to settle into your housing the way you can when you\u2019re a homeowner. You may need to get permission to paint a room in a bright color, or even to simply pound a nail into the wall to hang a picture.<\/p>\n When you\u2019re an owner, you never have to ask anyone\u2019s permission to repaint the walls, replace the bathroom faucets, or even rip out and remodel the kitchen.<\/p>\n Once your home is all done up in the colors, styles, and finishes that you\u2019ve selected, you\u2019ll feel a great sense of accomplishment and the desire to show off all the hard work you\u2019ve done to family and friends.<\/p>\n Historically real estate values appreciate over time \u2014 at a rate of between 3% and 5% per year, making it a solid investment<\/a> if you\u2019re a bit patient.<\/p>\n \u201cI’m a firm believer in the home purchase,\u201d says top agent Ann-Marie Sharp<\/a> of the Atlanta, Georgia suburb of Cumming.<\/p>\n \u201cIf you’ve been a renter for 10 years, that\u2019s a lot of money to pay to live in a place that you don\u2019t own.\u201d<\/p><\/blockquote>\n \u201cIf you\u2019d paid that same amount toward a mortgage, you\u2019d have gained equity in that long-term property investment,\u201d she adds.<\/p>\n Imagine you buy a house in 2019 for $250,000, and it gains (on average) 3% in value (or $7,500) every year that you own. Over a decade, your investment is now worth $325,000. Meanwhile, had you been renting, you could expect the cost of rent to increase 3% each year you\u2019ve stayed.<\/p>\n Plus, not having to worry about lease renewal and rehashing the terms every year or two can be a relief.<\/p>\n Buy a house now with several spare bedrooms, and soon you may find that what felt like trying on a pair of clown shoes fits you perfectly in a few years.<\/p>\n One room could become a nursery, your home office, or your hobby room for whatever passion fuels you: art, music, or crafting.<\/p>\n Let\u2019s play devil\u2019s advocate.<\/p>\n The average American will move 11.4 times<\/a> in his or her life, according to a FiveThirtyEight analysis of Census Bureau data. If there\u2019s a chance you\u2019d like to uproot in the near future, or aren\u2019t sure if the city you\u2019re in now will be where you\u2019d like to stay for the long haul, then it\u2019s best to hold off on buying a house if possible.<\/p>\n Buying a house is not a get-rich-quick scheme<\/strong><\/p>\n Buying a house may be the biggest investment you make in a lifetime \u2014 but unlike other investments, such as the stock market, it\u2019s not one where you can expect a quick return.<\/p>\n \u201cSome people are disappointed if they don’t gain a lot of equity in a year of homeownership. But buying a house isn\u2019t meant to be a short-term investment,\u201d advises Sharp.<\/p>\n Experienced house flippers<\/a> can make good money buying, updating, and selling houses in the short term, but they treat it as a business, often investing in multiple properties at once.<\/p>\n This quick-flip mindset simply doesn\u2019t work if you\u2019re just buying one primary residence with plans to sell within a year or so. Not only will you probably have to pay capital gains tax if you sell within two years<\/a>, but you won\u2019t have had much time to build up any home equity<\/a>.<\/p>\n \u201cIt\u2019s risky to buy a house with plans to sell it within a year. If the market softens, you might wind up with negative equity,\u201d explains Sharp. \u201cSo, if you’re only going to be living in an area for a year or so, and you’re not interested in keeping the house as a rental<\/a> after you move, I would not suggest buying a house.\u201d<\/p>\n If you still need the space, rent a single-family home<\/strong><\/p>\n Single-family homes now make up 35% of all rental housing<\/a> following the U.S. financial crisis. No longer do renters have to choose between buying a house or renting an apartment. In fact, single-family rentals on the market increased faster than apartment rentals in 22 of 30 major cities in the decade leading up to 2016<\/a>, according to a 2018 study by RentCafe.<\/p>\n You can rent a house and enjoy the same perks as you would as a buyer while living there, such as additional space, quiet, and your own yard. However, you\u2019ll still be subject to rent increases, and your landlord could try to sell the home while you\u2019re still in it<\/a> (though as a tenant you can exercise certain rights<\/a> depending on the lease agreement).<\/p>\n \n\n\n\n\n HomeLight-recommended real estate agents are top-tier negotiators who understand the market data that helps you save as much as possible when buying your dream home.<\/p>\n \n The stage and trajectory of your career \u2014 whether you\u2019re new or established, satisfied or on the lookout for a different job, and the nature of the work you do \u2014 will also help determine whether you should rent or buy.<\/p>\n Eighty-five percent of Americans<\/a> say they are, overall, happy with their jobs. But satisfaction with your career at the moment <\/i>doesn\u2019t necessarily indicate you\u2019ll be happy there long term. Here\u2019s a few signs that you are, in fact, on a sustainable path (and would be smart to start investing some of your earnings into a house):<\/p>\n Your company appears to be financially stable<\/strong><\/p>\n Employees don\u2019t always have full transparency into a company\u2019s financial health. But growing revenue, flat expenses, and low turnover<\/a>, as well as clarity around company values, a positive work atmosphere, and constructive conflict resolution<\/a> are signs of stability.<\/p>\n Your city offers a thriving job market<\/strong><\/p>\n Your area\u2019s overall number of job opportunities, employment growth rates, unemployment rate, average starting salaries, and annual incomes say a lot about its job market. WalletHub analyzed these factors to rank its 2018 Best Cities for Jobs<\/a>. The top 5 include:<\/p>\n Cross-reference that list with the firm\u2019s Best Cities for First-Time Home Buyers<\/a> and you can see where job opportunities are plentiful and housing remains affordable.<\/p>\n You\u2019re overall satisfied with the day-to-day<\/strong><\/p>\n Time flies when you\u2019re at work, you feel challenged but also like you contributed value every day, and you\u2019ve got a good relationship with your boss and coworkers \u2014 all of these are positive signs<\/a> that you\u2019re on the right career track.<\/p>\n According to Harvard Business Review, employees also tend to be happy when they have three things<\/a>: career (professional development and autonomy); community (connectedness and recognition); and cause (a sense of purpose). These satisfaction indicators will likely align with a decision to stay in a city long term and \u2014 if you so choose \u2014 to buy a house.<\/p>\n On the other hand\u2026<\/p>\n As of 2018, the median number of years Americans had been with their current employer was 4.2 years,<\/a> according to the U.S. Department of Labor, down from 4.6 years in 2014<\/a>. A survey from staffing firm Robert Half found that 64% of workers prefer \u201cjob-hopping,\u201d defined as staying at a job for less than two years.<\/p>\n Considering that selling a house typically takes two months<\/a>, it\u2019s certainly easier to uproot for a job across the country if you don\u2019t have to list your home on the market, find a buyer, and close a complex real estate deal first.<\/p>\n Will you need to relocate for a job sometime soon?<\/strong><\/p>\n Homeownership is just one of life\u2019s huge goals \u2014 most people also have big plans for their careers, too. Before you buy a house, assess whether your career plans could require you to relocate.<\/p>\n Maybe your chosen industry is flourishing in another city and you need to move to find work. Or perhaps you\u2019re in line for a promotion at your company\u2019s out-of-state location.<\/p>\n Although job relocation in general is on the decline (only 11% of job seekers<\/a> relocated for work over the past decade) you may even need to move because you\u2019re re-assigned to a distant facility in your current city that doubles or triples your commute.<\/p>\n In any of these scenarios, you\u2019re in for a world of hurt financially if circumstances force you to sell a house that you\u2019ve owned for less than two years (capital gains), or if you\u2019re underwater on your mortgage<\/a>.<\/p>\n Do you need cash on reserve for your business or employment situation?<\/strong><\/p>\n Serial entrepreneur Gary Vaynerchuk encourages his followers think about putting their net worth toward their professional endeavors, rather than use it for a down payment (the average down payment in 2018 was $15,490<\/a>).<\/p>\n His point is not that buying a house is a bad investment, but that entrepreneurs should use their capital to go \u201con the offense\u201d for their business<\/a>.<\/p>\n Additionally, you should make sure you have enough money left over in savings after the down payment in the event that your employment situation suddenly changes \u2014 personal finance expert Suze Orman recommends having at least 8 months\u2019 worth of savings in the bank<\/a>.<\/p>\n A 2019 study by Owl Labs found that 48% of U.S. workers work remotely at least once a week while 30% work remotely full-time<\/a>. If your company offers remote flexibility or you\u2019re in an industry where remote work is more popular (including healthcare, technology, and financial services, according to the same study), this growing trend could impact your homebuying decision in one of two ways:<\/p>\n What are your travel and vacationing preferences? Do they align with your dreams of homeownership? What do you like to do in your spare time? Will buying a home help support those activities, or not? Let\u2019s think through some of the trade-offs.<\/p>\n A single-family home may be just what you need to fully enjoy your leisure goals. Let\u2019s say you love gardening, or hosting backyard BBQs \u2014 neither of those activities are as enjoyable when you\u2019re living in an apartment.<\/p>\n According to research from Kiplinger, 87% of buyers want a house with a patio<\/a>. Who can blame them when outdoor spaces offer the chance to entertain friends or catch some fresh air on a nice day? Sure beats a measly balcony off a second-floor unit.<\/p>\n On the other hand, from a financial perspective, buying a house ties up your equity in a way that may curtail your leisure activities if your hobbies trend toward the expensive \u2014 like world traveling or wine collecting.<\/p>\n \u201cDon’t overextend yourself to buy a more expensive house if you want to maintain a lifestyle that offers the financial freedom,\u201d advises Sharp. \u201cFor example, if you want to travel, make sure your living expenses will allow that \u2014 whether you rent or buy a house.\u201d<\/p>\n It\u2019s not so easy to drop everything for a three-month trip abroad when you\u2019ve got home to manage. Unexpected home repair bills and monthly maintenance commitments like mowing your lawn may curtail your ability to travel or engage in hobbies in a way that renting won\u2019t. You should plan to set aside 1% of your home\u2019s value for maintenance every year<\/a> (on a $250,000 house, that\u2019s $2,500), and more if your house is on the older side.<\/p>\n Plus, you need emergency funds in the event that the furnace quits or a pipe breaks. If that\u2019s not a commitment you\u2019d be willing to make, then stick with renting which offers fixed monthly housing costs through your lease term.<\/p>\n You\u2019ve gathered the information. You\u2019ve run the numbers. You\u2019ve weighed the pros and cons of all of the factors which influence your decision between staying a renter or buying a house.<\/p>\n No matter which route you choose, this is an intensely personal decision. If you\u2019d like the convenience and simplicity of renting, then you\u2019ve made that choice knowing the trade-offs.<\/p>\n If the answer is \u201cget me the keys to my own house ASAP, please!\u201d then start with HomeLight\u2019s simple home affordability calculator<\/a> to do a little budgeting homework.<\/p>\n Then, connect with a lender<\/a> to start discussing your finances.<\/p>\n Lenders will verify your income, check your credit, and calculate what\u2019s called your debt-to-income ratio (your monthly debt payments divided by your gross monthly income<\/a>) to determine whether you qualify for a mortgage, and if so, how big of a loan you qualify for. These days, a 43% debt-to-income ratio<\/a> is the highest amount a lender will typically allow.<\/p>\n \u201cQualifying to buy a home is a process, so I recommend speaking to a lender as soon as possible,\u201d says Sharp. \u201cYou might find that it\u2019s not in the cards now, but a lender can help you get a plan together to work toward homeownership.\u201d<\/p>\n No matter your timeline, congratulations on the adventure ahead!<\/p>\n \n\n\n\n\n Get a preliminary home value estimate in as little as two minutes. Our tool uses information from multiple sources to give you a range of value based on current market trends.<\/p>\n \n ![\"homelight](\"https:\/\/www.homelight.com\/blog\/wp-content\/themes\/ccprototypev5\/images\/logo-small-cta.png\"){kind=logo}
\n <\/div>\n \n Find a top real estate agent near you<\/h3>\n
Family and long-term plans<\/h2>\n
Ready to settle in and stay awhile<\/h3>\n
1. Extra space and privacy<\/h4>\n
2. Sense of pride<\/h4>\n
3. Long-term value gains<\/h4>\n
4. Room to grow<\/h4>\n
Can\u2019t sit still for too long<\/h3>\n
\n <\/div>\n \n Save thousands when buying a home<\/h3>\n
Career and professional goals<\/h2>\n
Happy where you are with opportunity to grow<\/h3>\n
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Entrepreneur at heart or hungry for something new<\/h3>\n
What if your company is open to remote work?<\/h3>\n
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Leisure and lifestyle<\/h2>\n
Loves hosting barbecues, big backyards, and local attractions<\/h3>\n
Frequent flyer with expensive tastes<\/h3>\n
Is it the right time for you to buy a house?<\/h2>\n
\n <\/div>\n \n A quick (and free) way to check your home value<\/h3>\n