After the turmoil in the housing industry a few years ago, some people are still wondering if it makes sense to buy a home now, or simply rent. Home ownership isn’t the right answer for everyone, and there are, of course, two sides to the coin when it comes to this decision. 

The New York Times had an interesting article on this topic. They even had an online calculator to help consumers arrive at the right decision when it comes to purchasing a home. You can read the entire article (and check out the calculator) here. But let’s look at a few key points. 

How long are you planning to stay in your home?

If you’re looking for a short-term solution, buying may not be right for you because of the upfront costs (such as closing). But if you’re planning to stay for a longer period of time, those costs are spread out over a period of years. 

What kind of mortgage can you get?

It’s easy to focus just on the interest rate, but you need to consider what kind of down payment is required, and how long the term of the loan will be. 

What about taxes?

There are two sides to this question. If you rent, you don’t have to pay real estate taxes on your home. But the flip side is that homeowners get some relief for mortgage interest. So you have to be careful when comparing rent to monthly house payments. Your rental costs may look significantly lower, but you won’t reap the benefits at tax time. 

Where will housing prices go?

This is a real “crystal ball” question. Housing prices seem to be edging up. Will they continue to do so? In the recent housing crisis, some people got in trouble because they assumed their house would automatically be worth more with each passing month. With rent, you’re probably locked into a 6- or 12-month lease. When considering buying, you really need to take a longer-range view. 

In short, your current financial situation (your ability to make a down payment and the subsequent mortgage payments) and your future plans (how long you plan to remain in the area) play a significant role in deciding to rent or buy. 

But financial considerations aren’t the only things you should look at. Even if there is no financial upside, one way or the other, there are quality of life issues you’ll want to think about. When purchasing a new home you have the ability to select a floor plan that perfectly matches your family’s lifestyle. You can choose options and finishes that reflect your personality and taste. And while it may be subjective, there’s something about knowing that the house you live in is your home. 

Both renting and buying have their advantages—and challenges. Ultimately, you’re the only one who can decide if now if a good time for you to rent or to buy. If now is the right time for you to look at owning a home of your own, we invite you to take a look at some of the options available to you in the Hillsborough area. We’d love to be a part of your homebuilding experience.