rent or buy?
Issue 127 - March 24th, 2023
The constant battle in people’s minds when it comes to housing decisions - should I rent or buy? This is a deeply personal question and decision and there is not a one size fits all approach that can be given as “blanket” advice to every single person contemplating this right now. I have laid out some things to consider below, and I hope this helps you as you ponder this crossroads whenever it comes up for you or your clients in the future!
The decision to rent or buy a home depends on a variety of factors, such as your financial situation, lifestyle, and future plans. Here are some points to consider:
Pros of renting a home:
Flexibility: Renting allows you to move more easily, without the burden of selling a property.
Lower upfront costs: Renting typically requires less money upfront, such as a down payment and closing costs.
Lower maintenance costs: The landlord is responsible for repairs and maintenance, so you don't have to worry about unexpected expenses.
Cons of renting a home:
No equity: When you rent, you're essentially paying for someone else's investment, so you don't build equity in the property.
No control over rent increases: Your landlord can increase the rent when your lease is up.
Limited personalization: Depending on the terms of your lease, you may be limited in your ability to make changes to the property.
Pros of buying a home:
Building equity: Over time, as you pay down your mortgage, you build equity in the property.
Stable housing costs: With a fixed-rate mortgage, your monthly payments remain the same, giving you more predictable housing costs.
Personalization: As a homeowner, you have more freedom to customize the property to your liking.
Cons of buying a home:
Upfront costs: Buying a home requires a substantial down payment, closing costs, and other fees.
Maintenance costs: As a homeowner, you're responsible for repairs and maintenance, which can be expensive.
Less flexibility: Selling a home can be a lengthy process, so it's less flexible than renting.
Ultimately, the decision to rent or buy depends on your personal circumstances and financial goals. It's important to consider all the costs and benefits before making a decision.
The one thing I would say is that you need to write out a checklist for yourself and weigh your own pros and cons - don’t just buy a house because everyone else is doing it - this is not a group think decision… buying a home is one of the biggest life decisions you will only make a few times in your life, so make sure it makes sense for YOU!
Newsworthy Links To Share
North Texas' Pro Cricket Team Partners With Four-Time Indian Champs
Home sales spike 14.5% in February as the median price drops for the first time in over a decade: Sales of previously owned homes rose 14.5% in February compared with January, according to a seasonally adjusted count by the National Association of Realtors.
HOUSING REPORT THIS MONTH: Existing-home sales at 4.58m vs est. of 4.2m, breaking 12-month streak of declines, according to the National Association of Realtors
• Feb. existing-home sales up 14.5%, largest monthly increase since July 2020, after falling 0.7% prior month
• Forecast range 3.7m-4.49m from 60 economists surveyed
• Jan. unrevised at 4.0m pace
• 2.6 months supply in Feb. vs. 2.9 in Jan.
o 2.9 months supply seasonally adjusted in Feb. vs. 3.4 the prior month
• Median home price fell 0.2% from last year to $363,000, first year-over-year decline since 2012
• Inventory unchanged at 0.98m homes from a month ago
• 1st-time buyers 27% of total sales; all cash 28%; investors 18%
• Distressed sales -- foreclosures and short sales -- accounted for 2% of all transactions
• Days on the market at 34; 33 days prior monthAnxiety Strikes $8 Trillion Mortgage-Debt Market After SVB Collapse
Investors fear other banks will sell mortgage-backed securities, pushing down prices.
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The niche business of painting drab grass is growing like weeds, as people try to save money and water.
Small but mighty: According to Trepp, smaller banks hold almost 80% of commercial mortgages or nearly $2.3T in debt. The high interest rate environment is not only hurting valuations but is also cutting into cash flow for owners with floating-rate debt now faced with steep monthly payments. A record number of mortgages set to expire this year—$270B to be exact—are mostly held at banks with less than $250B in assets. (CRE Daily)
Commercial Property Debt Creates More Bank Worries
Regulators and analysts are growing concerned about loans backed by office buildings, as many skyscrapers and other office properties have lost value during the pandemic era.
Industry Decoded: The answer to brokerage growth? It’s no longer 'add agents'
Realtor membership went up a stunning 60% over the past decade, but declines are coming. It's time to talk about how to support the agents who stick around.