If you are like many baby boomers and considering cashing in on equity and favorable conditions for sellers, questions around whether you will move, or age in place, may be top of mind. Many people making this decision are considering whether they should buy a smaller home or if they should rent. While the answer to this question hinges on your individual circumstances, we have compiled some of the most important factors to weigh.
Rising Rents
Utilizing national census data, the trend clearly illustrates a consistent upward trajectory of rents since 1988. While opting to rent may seem
like a good option, you could expose yourself to a higher rental payment over time. This is especially problematic if you are on a fixed income.
Conversely, where you have a fixed-rate mortgage, you have stability in your monthly housing expenditure, allowing you to lock in your monthly payment for the entirety of your home loan. Freddie Mac recently remarked on this advantage,
"Homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won't change much in the long term, even when life's other costs do."
Homeownership Benefits, Beyond Fixed Monthly Expenses
According to a recent article from AARP, some of the most compelling reasons to buy, instead of rent when you downsize include:
Build Generational Wealth: Homeowning and building equity amasses more wealth than renting.
Stabilized Monthly Payments: We mentioned this above but was also listed here that if you have enough equity to purchase your next home outright, you eliminate the need for a monthly mortgage payment.
Aging in Place: Your needs will change over time and owning your home assures you the freedom to make renovations and updates that you need, forgoing updates that you do not need, or the hassle of getting approvals from landlords.
Weighing the decision of whether to buy or rent your next home after selling your current one, is a big financial decision and should be carefully considered. In the Triangle market, and in today’s national market, it can be confusing to understand the best options. My NC Homes have decades of experience helping homeowners in various stages, whether upsizing, downsizing, or new home building, but the constant is our area of expertise, the Research Triangle Park. We are experts in this market, and are here to help you make the best decision for you now, and in the future. Contact us today.
Posted by Larry Tollen on
Leave A Comment