Most people who own homes today likely started their adult life in a rental home or unit. In addition, recent statistics from the United States Census Bureau show that more than 31 percent of American homes occupied in 2016 housed renters, instead of owners, a number that seems to be trending higher. The dream for many, however, continues to revolve around home ownership, even though they may currently be renting. If you're renting right now, are you ready to make the leap into homeownership?
Renting or Buying Based on Lifestyle Demands
The first of these three factors - lifestyle and general demands - is often the most powerful in determining whether buying a West Edmonton home is even on the radar for the average adult. Adults who travel often or expect to have to move again within a few years for their career or other reasons often choose to stick with a rental. In addition, those with very hectic work, family, or social lives may find themselves unwilling to commit to homeownership during this time.
Housing Market Trends Help Make it Easier to Choose
The second factor with the power to help adults decide whether to rent or buy is the local housing market. If a down payment or real estate market prices are currently out of reach and are continuing an upward trend, continuing to rent may be the choice. However, it is important to note that in nearly every area of the country, buying a home is a more economical choice than renting, when all factors are considered, and some kinds of loans allow for a smaller down payment than what is considered standard.
People who are struggling to decide whether to rent or buy can use the length of time they expect to remain in their local area to help them decide what to do. In general, buying is considered the smarter choice if the prospective purchaser is planning to remain in the area for about five years or longer.
Buying a Home is an Investment-Building Opportunity
The prospective buyer's financial goals for the future is the third reason often cited for deciding whether to buy or rent. Because it is a proven fact that the purchase of a home is one of the most common ways in which the typical American will build wealth, it can be a powerful motivator for buying a home as soon as possible in adulthood.
Critical Checkpoints Before Considering Buying
Prospective buyers who feel they are ready to purchase a home can have a better experience and reap more satisfaction as a home owner if they make the following preparations before beginning to look for a home to purchase.
- Take time to do the financial work by making sure that debt-to-income ratios are low, credit scores are healthy, and cash savings are on hand to cover down payments, closing costs, and other expenses.
- Ask for a referral to a good lender, select a good mortgage option and get pre-approved for the mortgage.
- Find the right real estate agent and take time to learn about the buying process and the local real estate market.
For more help with tough housing decisions, such as when to buy and when to rent, buyers should consider asking their real estate professional to help them understand the local market conditions in their immediate area, for both rental and sale housing. Often, this type of targeted information can to make the choice of whether to buy or rent much clearer.
By Justin Havre