There are many hesitant buyers out there who like to keep renting and hoping that the interest rates will come down back to 3% – 4% soon, so they can jump back into the market and buy a home. What they often don’t realize is that they will spend more money on rent with a 1 or 2-year lease with no return on investment when compared to owning a home.
Here is the main catch. If you can afford the monthly mortgage and have enough downpayment, then go and buy. Yes, you might be paying more interest than previous years when compared but it is your private space and you build equity in that home besides the tax benefits you will have. We don’t have any control over interest rates but we do on the best decisions we make for our long term goals.
For Example: if you were to rent $2500 Town Home for 2 years lease term, then you would be end up paying $60,000 at the end of that period of time. And that does not come with any tax benefits, appreciation or equity. Plus, there are many programs that can help with your downpayment and closing costs, if you are a first time home buyer which gets easier to get into the game. On the other side, if you don’t have a stable financial situation, don’t have enough savings and have other very specific reasons to wait then hold on until things get more solid from your end first and then you take the step the become a homeowner.
Overall, I would recommend you focus on the monthly mortgage payment that you can afford. The home prices are still appreciating in many markets and limited inventory causing people to bid on the homes with over-asking prices and end up paying more than their market value.
