IsItBetterToRentorBuyaHome?
You’veprobablyaskedyourselflately:Isitevenworth tryingtobuyahomerightnow?
Withhighhomepricesandmortgagerates,rentingcan seemlikethesaferchoice.Ormaybeevenyouronly choice.That’saveryrealfeeling.Youshouldonlybuy ahomewhenyou’rereadyandabletodoit,andifthe timingisrightforyou.Buthere’sthethingyouneedto knowaboutrenting.
Whileitmayfeellikeasaferbettoday–andinsomeareasmightevenbelessexpensiveeach month–itcanreallycostyoumoreovertime.ABankofAmericasurveyfound70%ofaspiring homeownersworryaboutwhatlong-termrentingmeansfortheirfuture.Andthey’renot wrong.Whileowningahomemayseemwayoutofreach,ifyoumakeaplannowandsteadily worktowardit,homeownershipcomeswithseriouslong-termfinancialbenefits.
HomeownershipBuildsWealthOverTime
Buyingahomeisn’tjustabouthavingaplacetolive–it’sasteptowardbuildingyourfuture wealth.Why?Homepricestypicallyriseovertime,whichmeansthelongeryouwait,themore expensiveitistobuy.Andeveninsomemarketswherehomepricesaresofteningtoday,the overalllong-termtrendspeaksforitself(seegraphbelow): $0
Andashomevaluesrise,sodoesyourequitywhenyou’reahomeowner.That’sthedifference betweenwhatyourhomeisworthandwhatyouowe.So,witheverymortgagepayment,that equitygrows.Overtime,thatbecomespartofyournetworth.That’swhytheFederalReserve showsthetypicalhomeowner’snetworthis40Xgreaterthanthetypicalrenters.It’soneof thereasonswhyForbessays:
“Whilerentingmightseemlike[the]lessstressfuloption...owningahomeisstillacornerstone oftheAmericandreamandaprovenstrategyforbuildinglong-termwealth.”
TheBiggestDownsideofRenting
So,short-term,whydoesrentingfeellikeasimplerchoice?Lowermonthlypayments,less responsibility,nostringsattached.Butlong-term?Itcansting.Fordecades,whilehomeprices havebeenrising,renthasgoneuptoo.Andwhilerenthasheldrathersteadymorerecently, historyshowstheoveralltrendisupandtotheright.Thatmakessavingforahomemore complicatedthanever(seegraphbelow): 4
Rentdoesn’tbuildwealth.Itdoesn’tcomebacktoyoulater.Itpaysyourlandlord’smortgage –notyours.So,whetheryourentorown,you’repayingamortgage.Thequestionis:whose mortgagedoyouwanttopay?
Rentingmayfeelmoredo-abletoday.Butovertime,itcouldcostyoumore–without helpingyoubuildanythingforyourfuture.Thefirststeptowardgettingoutoftherental trapistosetaplan.Let’sconnect,soyou’rereadywhenthetimeisrightforyou.
TheMisconception:
“Ihavetoput20%ofthe purchasepricedown.”
TheReality: Manypeopledon’t,especially first-timebuyers.
TheMedianDownPaymentforFirst-TimeBuyersIsLessThan20%
CommonMisconception 9% First-TimeHomebuyers
Source:NAR
Andyoudon’tevenhavetoputthatmuchdown.Therearesome homeloanoptionsthatrequireaslittleas3.5%oreven0%down.
Plus,datashows80%offirst-timebuyers qualifyforhelpwiththeirdownpayment viadownpaymentassistanceprograms.
Theaverageprogram providesabenefitof roughly$17,000. 20%
Unfortunately,only13%actually takeadvantageofthat.
Tolearnmoreaboutyourloanoptionsorassistanceprograms, connectwithatrustedlender.
TheBiggestBrightSpot forBuyers:Inventory
There’snoarguingthepastfewyearshave beenchallengingforbuyers.Butthere’sone bigbrightspottodaythatmakesfindinga homeinyourbudgetabiteasier:howmuch inventoryhasimproved.
SignificantGrowthAcrosstheNation
Nationally,thenumberofhomesforsaleisgrowing–andthat’strueinallregionsofthecountry. That’sshowninthisdatafromRealtor.com(seegraphbelow).Ineachofthefourregions, inventoryisupatleast15%comparedtothesametimelastyear.IntheWest,it’sactuallyup almost33%year-over-year:
Morehomesforsalehelpsthemarketbecomemorebalanced.Forthepastfewyears, sellershavehadtheupperhand.Now,thingsarestartingtoshift.Nationally,it’snotafull-on buyer’smarketyet,butit’sheadingtowardahealthierplace,especiallyforhomebuyers.
HowMuchGrowthWe’veSeenVariesbyArea
But,howlongit’sgoingtotaketoachievetruebalanceisgoingtovarybasedon whereyoulive.Youcanseethatplayoutinthegraphbelow.Justlikebefore,thebluestill showsthatallregionshaveseengrowthlately.Theredandgreenareaddedcontextonhow thatcomparestoamorenormalmarket(likewhatwehadbackin2017-2019).
•Themarketsthathaveredbarsstillhavelessinventorynowthanwhat’snormal,even withtherecentgrowth.Thisiswhereyou’llstillwanttostartwithyourbestoffer.
•Themarketsthathavegreenbarsarealreadybackatorslightlyabovenormallevels, soyoumayfindsellersareabitmorewillingtonegotiateintheseplaces.
WhereHousingInventoryIsGrowingtheFastest
ComparedtoPre-PandemicNorms
Acrosstheboard,youhavemoreoptionsnowthanyouwould’vejustoneyearago.Andthat’sa reallygoodthing.AsRalphMcLaughlin,thentheSeniorEconomistatRealtor.com,says:
“Itcouldbeaparticularlygoodtimetogetoutintothemarket...you'regoingtohavemore choice.Andthat'snotsomethingthatbuyershavereallyhadmuchoverthepastseveralyears.”
Morechoicesmeansitshouldbeabiteasiertofindahomeyoulove.Buthowmuchinventory hasgrownisgoingtovarybyregion,andevenbyneighborhood.Andthat’swhyyouneedan agent’slocalexpertisesoyoucanadjustyourstrategyaccordingly.
BottomLine
Reachoutifyouwanttoseewhat’savailableinandaroundourarea.
Source:Realtor.com
Forthosewhoareable,itmaybeanopportunetime togetintothemarket,whiletheinventoryisplentiful andthebuyerscannegotiateforlowerprices.
LawrenceYun ChiefEconomist,NAR
HousingMarketForecasts fortheRestof2025
Ifyou’vebeenwatchingthemarket,you’velikelynoticedafewchangesalreadythisyear. Butwhat’snext?Fromhomepricestomortgagerates,here’swhatthelatestexpert forecastssuggestfortherestof2025–andwhattheseshiftscouldmeanforyou.
WillHomePricesFall?
Manybuyersarehopinghomepriceswillcomedownsoon.Andrecentheadlinesaboutprices dippinginsomeareasaremakingpeoplebelieveit'sjustamatteroftimebeforethere’sabigger drop.Butherearethefacts.
Whilehomepricegrowthisslowingdown,thatdoesn’tmeanwe’reheadedforacrash.It justmeansthingsaremoderatingandpricesaren’tclimbingnearlyasfastastheywere.Asthe NationalAssociationofHomeBuilders(NAHB)explains:
“Housepricegrowthslowed...partlyduetoadeclineindemandandanincreaseinsupply. Persistenthighmortgageratesandincreasedinventorycombinedtoeaseupwardpressureon houseprices.Thesefactorssignaledacoolingmarket,followingrapidgainsseenin previousyears.”
Butlikewithanything,itvariesbyarea.Somemarketsarecoolingmorethanothers.Evenin marketswherepriceshavecomedownslightly,theaveragedipisjust-3.5%.That’safarcry fromthenearly20%declinethemarketexperiencedduringthe2008crash.Plus,thosesmall changesareeasilyabsorbedwhenyouconsiderhowmuchhomepriceshaveclimbedoverthe pastfewyears.
Thetakeaway?Pricesaren’tcrashing.They’reexpectedtokeepclimbingnationally–just notasquicklythesedays.
Andsomemayarguethey’llbeclosertoflatbytheendofthisyear.Butthisisgoingtobe differentbymarket,withsomelocalupsanddowns.So,leanonaprotoseethelatestprice trendsforyourarea.
WillMortgageRatesComeDown?
Anothercommonthoughtamongtoday’sbuyersis:I’mjustgoingtowaitforratestocomedown. Butisthatasmartstrategy?AccordingtoYahooFinance:
"Ifyou’relookingforasubstantialinterestratedropin2025,you’lllikelybeleftwaiting.Thelatest newsfromtheFederalReserveandotherkeyeconomicdatapointtowardsteadymortgagerates onparwithwhatweseetoday."
Inotherwords,don’ttrytotimethemarketorwaitforadropthatmaynotbecoming.While ratesdidcomedownabitoverthesummer,mostexpertssayrateswillremaininthe6s,and projectionshavethemsettlinginthemid-6%rangebytheendofthisyear(seechartbelow):
TheTakeawayforBuyers
Thismarketrequiresstrategy,notguesswork.Pricesarestillrisingnationally(justmoreslowly), andratesareprojectedtostayprettymuchwheretheyare,sothebiggerpictureisoneof moderation,notameltdown.
Ifyouwanttomakeamove,yourbestbetistofocusonyourpersonalsituation–notwhatthe headlinessay–andworkwitharealestateprowhoknowshowtonavigatetheshifting conditionsinourlocalmarket.So,ifyouneedtomove,let’stalkabouthowtomakeithappen andwhatyoushouldwatchfor.Becausewhileratesmaynotbeaslowasyouwantthemtobe, youdon’twanttoputyourneedsonthebackburner,hopingforabigdropthedatashowsisn’t likelytohappen.
Ofcourse,thingscanchange.That’swhyworkingwithanexpertwhoiskeepinganeyeonall theeconomicfactorsthatcaninfluencemortgageratesisgoingtobeessentialthisyear.That’s becauseshiftsinthingslikeinflation,employment,andotherkeydriverscouldimpacthow mortgageratesmovegoingforward.
BottomLine
Let’stalkaboutwhat’shappeninginourareatobuildaplanthatworksforyou.
HowChangingMortgageRates
Expertssayrateswillcomedownslightlybytheendoftheyear–butsomevolatilityisexpected.
Averagemortgagerateswilldeclinemodestlybutremain above6percent,withlikelyboutsofvolatility.
So,youshouldn'ttrytotimethemarket.Instead,it'sbettertofocuson howevenasmallchangeimpactsyourfuturemortgagepayment.
TheTop2Buyer MistakesToday
Intoday’scomplexmarket,you’llwanttobesure youhaveadvicefromateamofprofessionals.If youdon’tleanonthepros,youmaymakesome costlymistakes.Herearethetop2otherbuyersare makingrightnowandhowyouragentandlender canhelpyouavoideachone.
1.PuttingOffPre-Approval
Aspartofthehomebuyingprocess,a lenderwilllookatyourfinancestofigure outwhatthey’rewillingtoloanyoufor yourmortgage.Thisgivesyouagood ideaofwhatyoucanborrowsoyoucan reallywrapyourheadaroundthe financialsideofthingsbeforeyoustart lookingathomes.
Whilehousehuntingcanbealotmore funthantalkingaboutfinances,youdon’t wanttodothisoutoforder.
Makesureyougetyourpre-approvalfirst beforehousehunting.AsCNET explains:
“Ifyouwaittogetpreapproveduntilthe lastminute,youmightbescramblingto contactalenderandmisstheopportunity toputabidonahome.”
BottomLine
2.BuyingMoreHouseThanYou CanAfford
Withtoday’smortgageratesandhome prices,it’sevenmoreimportanttoavoid stretchingyourbudgettoofar.Thisis especiallytruebecauseotherhousing expenseslikehomeinsuranceandtaxesare ontherise.
Besuretofactortheseexpensesintoyour budgetsoyoudon’toverextend.Bankrate offersthisadvice:
“Focusonwhatmonthlypaymentyoucan affordratherthanfixatingonthemaximum loanamountyouqualifyfor.Justbecause youcanqualifyfora$300,000loan doesn’tmeanyoucancomfortably handlethemonthlypaymentsthat comewithitalongwithyourother financialobligations.”
Thegoodnewsisyoudon’thavetodealwithanyoftheseheadaches,ifyouhavethe rightpartnerbyyourside.Let’sconnectsoyouhaveaprowhocanhelpyouavoidthese costlymistakes.
ThingsToAvoid AfterApplying foraMortgage
Oncealenderhadreviewedyour financesaspartofthehomebuying process,youwanttobeasconsistent aspossible.
Don’tchangebankaccounts.
Don’tdepositcash intoyouraccounts beforespeaking withyourbank orlender.
Don’tapplyfornewcreditor closeanycreditaccounts.
Don’tco-signother loansforanyone.
Don’tmakeany largepurchases.
Thebestadvice?Onceyou’vedoneyourmortgageapplication, alwaystalktoyourlenderbeforedoinganythingfinancialinnature.
5ReasonsYouNeedanAgent WhenBuyingaHome
Whenitcomestobuyingahome,expertadvicefromatrustedrealestateagentispriceless, nowmorethanever.Andhere’swhy.Anagentdoesalotmorethanyoumayrealize.
Youragentisthepersonwhowillguideyouthrougheverystepwhenbuyingahomeandlook outforyourbestinterestsalongtheway.Theysmoothoutacomplexprocessandtakeawaythe bulkofthestressofwhat’slikelyyourlargestpurchaseever.Andthat’sexactlywhatyouwant anddeserve.
ThisisatleastpartofthereasonwhyasurveyfromBrightMLSfoundanoverwhelmingmajority ofpeopleagreeanagentisakeypartofthehomebuyingprocess(seevisualbelow):
Ofrespondentsagree"Itwouldbe
Ofrespondentsbelieve
1.DeliverIndustryExpertise:Therightagent–theprofessional–willcoachyou througheverythingfromstarttofinish.Withprofessionaltrainingandexpertise,agents knowtheinsandoutsofthebuyingprocess.Andintoday’scomplexmarket,thewayreal estatetransactionsareexecutedisconstantlychanging,sohavingexpertadviceonyour sideisessential.
2.ProvideExpertLocalKnowledge:Inaworldthat’spoweredbydata,agreat agentcanclarifywhatitallmeans,separatefactfromfiction,andhelpyouunderstand howcurrentmarkettrendsapplytoyouruniquesearch.Fromhowquicklyhomesare sellingtothelatestlistingsyoudon’twanttomiss,theycanexplainwhat’shappeningin yourspecificlocalmarketsoyoucanmakeaconfidentdecision.
3.ExplainPricingandMarketValue:Agentshelpyouunderstandthelatestpricing trendsinyourarea.What’sahomevaluedatinyourmarket?Whatshouldyouthink aboutwhenyou’remakinganoffer?Isthisahousethatmighthaveissuesyoucan’tsee onthesurface?Noonewantstooverpay,sohavinganexpertwhoreallygetstruemarket valueforindividualneighborhoodsispriceless.Anofferthat’sbothfairandcompetitive intoday’shousingmarketisessential,andalocalexpertknowshowtohelpyouhitthe mark.
4.ReviewContractsandFinePrint:Inafast-movingandheavilyregulatedprocess, agentshelpyoumakesenseofthenecessarydisclosuresanddocuments,soyouknow whatyou’resigning.Havingaprofessionalthat’strainedtoexplainthedetailscouldmake orbreakyourtransactionandiscertainlysomethingyoudon’twanttotrytofigureouton yourown.
5.BringNegotiationExpertise:Fromoffertocounterofferandinspectiontoclosing, therearealotofstakeholdersinvolvedinarealestatetransaction.Havingsomeoneon yoursidewhoknowsyouandtheprocessmakesaworldofdifference.Anagentwill advocateforyouastheyworkwitheachparty.It’sabigdeal,andyouneedapartnerat everyturntolandthebestpossibleoutcome.
Bottom73%fasterLine
Realestateagentsarespecialists,educators,andnegotiators.Theyadjusttomarket changesandkeepyouinformed.Andkeepinmind,everytimeyoumakeabigdecisionin yourlife,especiallyafinancialone,youneedanexpertonyourside.Expertadvicefroma trustedprofessionalispriceless.
Buyingahomeisoneofthebiggestfinancial decisionsofyourlife.Ifyouthinkyou’reready tobuyahousein2025,findingarealestate agentwiththerightexperiencetoguideyou throughtheprocesswillbekey.
Doyouhavequestionsabout somethingyoureadhereorabout buyingahomeingeneral?Don’t hesitatetoreachout.
Whetherit’shousingmarket-related, orsomethingaboutyourspecific situation,I’vehelpedotherbuyers findsuccess–andIcanhelpyoutoo.
