Before writing this blog post, I peaked at bankrate.com, and the rate for a 30 year mortgage to purchase a home was 5.30%. For some, that’s big sticker shock being that rates were around 3% a few months ago. So the big question is should you rent vs buy.
Every market and person is different but here are a few things to keep in mind:
- First, do the calculations based on your market and keep in mind that rents are rising in most major markets.
- Second, when you buy a house, you build equity each month. When you rent, you are building equity for a landlord.
- Third, when looking at the calculations, you need to be able to stay in your house for a few years to recoup the cost associated with buying a house. If you think you will need to move relatively soon, renting may be an option to consider.
- Fourth, as I’ve said in a prior post, my parents first mortgage was at 11%. My first mortgage was at 6.5%. A 5 % mortgage is still a really good rate historically.
Every person/couple is different, but consider the whole picture when making a decision about your situation.