Helpful Tips for New Homeowners
We are living through some of the historically most challenging times to afford a basic necessity: having a roof over our heads. With an unpredictable housing market and incredibly high rent payments, it takes time to decide whether to rent or buy in 2023.
Either way, you'll be paying more for living than you have in a while. But don't worry—In this blog, we will discuss the ups and downs of renting and buying this year. Use the information to help you make the best choice for you.
What Do Experts Predict?
No matter the market conditions, buying a home is a big decision. Add on the stress of the chaotic housing market we have today, and it's one of the most difficult choices you'll make in a lifetime. Both rent and mortgage payments are historically the highest they have been in decades!
Some experts say renting will be the more affordable option, while others claim buying a home is the wisest. In all honesty, there is no accurate prediction for the 2023 housing market. It's best to make the right decision for your individual needs rather than relying on such an unpredictable market.
Nevertheless, this blog will walk you through the things you should consider when deciding whether to rent or buy in 2023.
Renting in 2023
Let's take a deeper look at what it is like to rent in 2023. Keep in mind that everything is approximate. Renting or buying depends heavily on your area and the type of home you are looking for. Furthermore, the current market is one of the most challenging to predict.
Check out the following pros and cons of renting in 2023 and discover if it is the right move for you.
PRO | A Better Short-Term Home
Unless you're looking for a place to call home for at least ten years, renting is likely a better option. There's far less to worry about when renting a house, apartment, or condo. Based on recent trends, the rent you pay now will likely continue to increase. However, many other financial elements will increase or decrease with the market when owning a home.
Your home mortgage will stay fixed, but other factors are highly unpredictable, like taxes and additional fees. These amounts add up quickly, equating to a total financial responsibility for which you may not have been prepared.
If you're looking for a home for the next two to five years, it may be safer to rent until the market becomes more predictable. The last thing you want to do is lose money on an expensive home simply because of when you bought it.
It takes time to earn back what you spend on buying a home. With today's market, it's safe to say it will take at least ten years to see a decent profit from your buy. Therefore, renting is likely a better option if you're not ready to commit.
CON | Renting May Continue to Become More Expensive
For now, it's best to plan on your monthly rent increasing some with each year you renew your lease. Experts agree that it's tricky to say whether or not the price of rent will halt or continue rising in the next year or so. On the other hand, it's not impossible that it will drop in the next couple of years. So, it's better to play it safe and expect a yearly increase on your current rent.
In contrast, if you decide to purchase a home in 2023, your mortgage will be locked in. So, perhaps it's wiser to establish a mortgage now rather than paying for increased rent every year. It honestly comes down to where you purchase your home and what kind of home it is due to the unpredictable market.
Buying in 2023
Now, let's dive into the possibility of buying in 2023. While the future remains hazy, some professionals believe in a gradual decrease in home prices and a switch to a buyer's market.
Continue reading to determine what's best for you in 2023.
PRO | Home Prices are Predicted to Drop
The market experts are hoping for at least a slight fall in home prices. Some predict only a 1.5% decline, while others are gearing up for a decrease of 5% or even as great as 10%. Keep in mind that housing costs vary by location. The best thing to do is talk to your local real estate professionals.
CON | Mortgage Rates May Rise
This past year was rough—we hadn't experienced such high inflation levels since the early 1980s! Unfortunately, it's almost impossible to predict if rates will decrease in the coming year. Home mortgages greatly depend on many factors, including inflation.
As rates continue to rise, so will home mortgages, making it one of the most challenging times to commit to purchasing a home.
CITED: https://en.as.com/, https://www.businessinsider.com/, https://www.experian.com/