As a renter, you have a tough choice to face each year: renew your current lease, start a new one, or buy a home. In the past year, current and new renters have seen their rent increase, sometimes a jaw dropping increase like 20%. So if you are considering renting as an option in 2023, it’s worth taking the time to look at the current trends, and the trends indicate that rent will continue to climb.
These rising costs may force you to reconsider what other alternatives are out there. If you are looking for more stability, it could be time to prioritize homeownership. One of the major benefits to owning your home is that it provides a relatively stable monthly cost that you can lock in for the duration of your loan. Imagine the peace of mind that comes with not having to worry about rent increases each year! It’s hard to build wealth when the cost of your shelter keeps going up. And let’s be honest, the rate of increase may fluctuate, but the increases aren’t stopping. Rent is only going to continue to climb up and up.
Homeowners also enjoy the major added benefit of home equity, which has grown substantially. In fact, the average homeowner gained over $34,000 in equity over the past year alone. As a renter, the money you pay in rent only covers the cost of your dwelling and when you leave that rental, you leave with nothing. But when you pay your mortgage, you grow your wealth through the forced savings that is your principal paydown.
As I always say, most people in this country pay a mortgage, it’s up to them whether it is theirs or their landlord’s.