Buying vs. Renting in 2023

GeneralBuyers

Jun 5

Which is right for you?

Are you feeling the impact of high inflation?

I bet you're noticing the rising prices of groceries, gas, and pretty much everything else. As a renter, you're probably experiencing it firsthand with your monthly rent going up all the time. Given these circumstances and the uncertainty of a potential recession, you might be wondering if it's still a good idea to buy a home.

Well, let me tell you, it absolutely is! Here's why.

Owning a home actually shields you from the rising costs of inflation.

When you buy a home with a fixed-rate mortgage, your monthly housing costs stay stable over the long term, even as other expenses continue to rise. While rents tend to increase as time goes on, a fixed-rate mortgage payment remains predictable throughout the life of your loan, which is usually around 15 to 30 years. So, while everything else is getting more expensive, you can keep your housing payment nice and steady.

Now, let's talk about renting.

When you rent, your monthly payments tend to move alongside inflation. That means as inflation goes up, your rent goes up, too (trust me, it's not fun). But here's the good news: with a fixed-rate mortgage, you protect yourself from those future rent hikes. Imagine this: as inflation keeps rising, your property manager might decide to increase your rent when your lease is up for renewal. Sounds stressful, right? Well, with homeownership, you don't have to worry about that. You get to enjoy the perk of having your largest monthly expense remain stable, even in uncertain economic times.

Another great thing about stabilizing your housing payment is that when your income goes up you have more money in your budget to spend, give, save, or invest. In an article by RealtyTrac, Peter Miller addresses rising incomes:

“ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”

Rather than having your hard-earned raises end up in the pocket of your landlord, stabilizing your house payment with a fixed mortgage can allow your money to benefit YOU. If you invest your increased income in investments whose returns outpace inflation, then you are protecting your extra income from inflation as well.

So, here's the bottom line: having a stable housing payment is especially important when inflation is high.

And that's exactly what homeownership offers you. It's like having a shield against rising costs. Sounds pretty great, doesn't it?

Brent Edwards (aka Brent the Broker) is a residential real estate agent and Realtor in San Diego, CA who helps clients buy and sell homes in San Diego, California and all surrounding areas. Brent is a highly-recommended Realtor in San Diego by family, friends and past clients. Call Brent today at 619-550-8070 if you have any questions about real estate in San Diego or you'd like to buy or sell a home.