Are you planning to make a move in the Triangle in 2023? You may already be wondering whether it’s smarter to rent or buy your next home. It’s true that the last few years left many people scrambling to get into their piece of the real estate market, which caused housing costs to rise across the Triangle. And that reality wasn’t limited to mortgages alone; that also included rental prices across Raleigh-Durham, which are still significantly higher than they were pre-pandemic.
According to Zillow, the median rent in Raleigh is currently $1,895 per month. It’s even higher than that in other parts of the Triangle, specifically in cities closer to the Research Triangle Park, such as Cary and Morrisville. Yet in some parts of the Triangle, you may be able to purchase a home with a mortgage below the median rent.
How do you know what’s right for your needs so you can make the right choice? Here are three points to consider as you look toward your future.
Know what you’re looking for
If you have an idea of the type of home that’s ideal for your needs, that may be one of the biggest determining factors for whether to buy or rent. If you want a low- or no-maintenance home, you may already know renting is the way to go. But if you want more room for a pet or a growing family, it may be time to consider the purchase of a home.
It’s a good idea to ask yourself what you want out of your next home. Create a housing wish list that can help you determine what you’re looking for, which includes the number of bedrooms you want, locations you’re willing to explore, whether you want a home office, commute times, and more. Knowing your budget ahead of time can even help you figure out what the best option may be. Advanced preparation can help you significantly as you work toward making this type of determination.
Determine what is best for you financially
The purchase of a home may seem intimidating, but when you know how to make a mortgage work for your needs, it can be empowering as well. If you’re a first-time buyer, there are numerous programs that may assist you in obtaining your first home. And while interest rates are higher than they were during the pandemic, it’s important to remember that interest rates aren’t set in stone unless you want them to be. As interest rates begin to fall again, you will be able to refinance into a lower rate. It’s important to work with a trusted, local mortgage company who can help you make a sound financial decision well into the future.
If the thought of down payments and potential maintenance costs is something you’d prefer to avoid, renting may be the better option for you. Still, you may want to consider the long-term benefits of buying. For example, you’ll have stability in your payments without worrying that your landlord may boost your rental costs. You’ll also get tax benefits that you don’t get from renting. There’s also the big one: you’ll grow equity in your home the longer you’re there, which gives you more financial freedom in the future.
Plus, keep in mind that if you’re required to put down a security deposit equal to full month’s rent and your first month’s rent at once, you may not be far off from making a down payment on a mortgage. Be sure to think through those options as well to determine what’s best for your financial needs down the road.
Weigh your long-term goals
Once you’re settled into your new space, how long do you plan to stay there? If you’re already thinking ahead about whether you want to stay in the area, or you’re not sure about a location, it might be best to rent.
Renting may give you enough flexibility that it makes sense to choose that option. Are you willing to pay a premium to be close to work? Would you rather have a pool and gym than a yard? Are you single and not yet ready to settle into a mortgage? Ask yourself what you might be sacrificing with your lifestyle to purchase a home.
But if your long-term goals involve building equity and being close to the things your family needs and wants for many years to come, it might make more sense to choose a mortgage instead. You’ll want to think through those choices before making a final decision.
The takeaway
Choosing to rent or buy a home is a deeply personal decision and only one you can make. The key is to know what you want and what your goals are, then the decision may become clear. No matter what you choose, it’s a great time to call the Triangle your home.
The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]