<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=1955936548054264&amp;ev=PageView&amp;noscript=1">
 

Should I Rent or Buy?

< Back to Articles | Time to Read: 5 minutes

The burning question on many minds is whether it’s smarter to rent right now or buy a house. Let's take a look at the numbers, the pros and cons, and the steps you can take to buy in 2024 if it makes sense for you. 

Renting vs. Buying in 2024

Historically, renting has remained a cheaper housing option, mainly due to the extra costs of owning, such as property taxes, PMI (private mortgage insurance), HOA fees, and home maintenance. However, over the last few years, renting has become increasingly more expensive. In fact, just since February of this year alone, rent prices have gone up 5% and up 14% from 2019. Those are staggering numbers! 

Along with these rent price increases, landlords and rental companies are adding on what's now being referred to as 'junk fees.' These junk fees include pet fees, trash pick-up services, pest control, deposits, and even arbitrary costs like 'January fee.' The problem isn't necessarily the fees but the amount of these fees. Landlords are charging whatever they want, making renting even more unaffordable. Currently, over 40% of renters in the U.S. are paying more than 30% of their income on rental costs. 

Let's take a moment to look at the numbers associated with renting and buying. Currently, the median price of a 30-year monthly mortgage payment is $1,672, while the median price of monthly rent sits at $2,038. That's a median difference of $366 a month or $4,392 a year, which may not seem like much, but remember, these numbers may be higher or lower depending on your location. 

If you plan to rent in a metro area, you can expect the median rent to be well above average. The unpredictable nature of rent increases (especially in cities) could leave you struggling to keep up with costs or force you to move elsewhere. 

Building Wealth Through Home Equity

You've probably heard the term equity, but what is it, and why does it benefit you? Simply put, home equity is like a piggy bank that gets filled up over time. As you pay off your mortgage, you slowly become the owner of more and more of your home. Here's how it works: If your home is worth $300,000 and you still owe $150,000, you have $150,000 in equity. So, if you are renting, you cannot build equity. 

“Instead of continuing to pay rent and help someone else gain equity, take the opportunity to start earning it for yourself," recommends Churchill Mortgage Dallas Branch Manager, Mason Whitehead

Why Now Is a Good Time to Buy

With high mortgage rates and low inventory, you're probably wondering why now would be a good time to buy. Consider the cost of waiting to buy. When rates go down, property demand will increase, driving up prices, and the market will be flooded with home buyers. Buyer competition will be fierce, and you'll likely be competing in bidding wars. 

Whitehead says, "The biggest mistake buyers make is not moving forward now in the hope that rates or prices will come down. At least in Texas, one of the states with the highest demand nationwide, that is just not happening." 

Rent the Rate, Buy the Home

We know rates will drop eventually, and many industry leaders believe rates are at or near their peak. Churchill’s COO, Matt Clarke, says, "We're approaching a glass ceiling where rates going too much higher would be detrimental to other critical aspects of the economy." So, instead of waiting for rates to drop and risking higher home prices, buy now and refinance when rates drop. 

With a fixed-rate mortgage, your principal and interest payments remain constant over the life of the loan, allowing you to budget more accurately–something that cannot be said when renting. 

Buy a Home More Affordably

Not every renter can buy a home right now, and that's okay! But, if you're a renter who feels ready to buy but you’re worried about the down payment, consider down payment assistance and grants. There are countless programs available to help first-time home buyers succeed.

Click here to find and apply to local home buying programs by state.

If you're a teacher, law enforcement, firefighter, or EMT, consider HUD's Good Neighbor Next Door Program. This program offers a 50% discount on select housing listing prices. However, eligible buyers must live in the property for at least 36 months. 

Also, remember most first-time home buyers do not have 20% down in today’s market, but there are still options to get a home with a 5-10% down payment. The more you put down, the more house you can afford. 

Bottom Line

By "renting the rate" and eventually leveraging your refinancing opportunities, you can start to build equity and help secure your financial future. While the process may seem daunting, the steps to buy a home are well worth the effort when considering the long-term benefits. 

If you're on the fence about whether to rent or buy, reach out to one of our Home Loan Specialists. We are ready to answer your questions, find a loan that's right for you, and most importantly, put you on a path to debt-free homeownership!

 

Are you buying a home or refinancing?

Where are you planning to buy a home?

Please Select a State

What is your full name?

Please Enter a Name
Please Enter a Last Name

What is your email address?

Please Enter a Valid Email Address
  We won't share your information.

Next, we need to verify a phone number.

Enter a Valid Phone Number
Please Select a Message Type

Enter your phone number and we'll text you a 6-digit security code to verify it's you. Standard texting and data rates may apply. For more information, read our Privacy Policy.

Enter the 6-digit code sent to your device.

 Code sent to +1234567890

Finally, how did you hear about us?

Please Select an Option

By submitting this form, I/we agree to your Privacy Policy Terms of Use and authorize Churchill Mortgage Corporation and/or their Preferred Provider for our area and/or The Churchill Agency to receive the above information to assist in obtaining a home loan.

I/we also authorize Churchill Mortgage Corporation, The Churchill Agency and/or their Preferred Provider for our area to contact us regarding but not limited to mortgage and insurance services and products via telephone, mobile phone (including through automated dialing), and/or email, even if telephone numbers or email I/we provide are on any Do Not Call/Contact Registry, such as corporate, state, or the National Do Not Call Registry. The submission of this form does not constitute in any way a formal loan application or a commitment for a loan. By communicating with us by phone, you consent to calls being recorded and monitored. By participating, you consent to receive text messages sent by an automatic telephone dialing system. Consent to these terms is not a condition of purchase.

Your answer will NOT negatively affect your mortgage application. Your answer does not mean the Lender or Other Loan Participants agree to communicate or provide documents to you in your preferred language. However, it may let them assist you or direct you to persons who can assist you. Language assistance and resources may be available through housing counseling agencies approved by the U.S. Department of Housing and Urban Development. To find a housing counseling agency, contact one of the following Federal government agencies. U.S. Department of Housing and Urban Development (HUD) at (800)569-4287 or www.hud.gov/counseling

Es probable que su transacción de préstamo hipotecario suceda en inglés. Por medio de esta pregunta, solicitamos información para determinar si existen comunicaciones disponibles a su servicio, en su idioma preferido. Sírvase tener en cuenta: posiblemente NO hay comunicaciones disponibles en su idioma preferido.

Thank You!

Thank you for choosing Churchill Mortgage to help you with your home loan needs!

Our team is already hard at work connecting you with your Home Loan Specialist. Rest assured that we've received your request and will be in touch with you shortly.

social proof logos

Already working with someone at Churchill?

Find Your Home Loan Specialist

Please Select a Loan Officer