The decision to buy a home or rent is rarely an easy one, making it even more difficult for first-time homebuyers. For homeowners today, the real estate market can be a whirlwind of ups and downs. When do you know it's time to start looking for your own place?

A real estate boom during the pandemic pushed home prices to an all-time high. Higher mortgage rates were also part of the issue, with some wondering if they should wait for more affordable options.

Homeowners who want the security of a set mortgage payment are faced with one - renting is expensive and costs are also projected to continue to rise. Over the past few years, rents have soared along with inflation, and they're likely to keep climbing.

Which is better for you? Buying or renting? There's a lot to consider but don't worry, we've got your back. Reach out to schedule a consultation and we'll guide you through the process of deciding which option is best for you. You may also find it helpful to ask yourself the following questions:

How long are you planning on living in your home?

You'll get the most financial benefit from a home purchase if you plan to own it for at least five years. If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

There are costs to buying and selling a home, so it may take a while for the property to be worth enough to cover what you paid.

Housing markets can fluctuate from one year to the next, but in general you're likely to find that a property's value will increase as it ages.4 As you own your property for an extended period of time, more benefits may accrue from its appreciation.

Once you find a great community that you want to stay in for many years, it pays off to buy instead of rent. You'll get your money back by letting the place appreciate, plus you'll build equity as you pay down your mortgage – and you'll feel more stable and secure than if you rented.

And what you probably don't know is that, as your home's value gradually increases, so will your equity and net worth. Plus, when you stay in your home for the life of the mortgage, you'll stop making those payments. As a result, your housing costs will decrease even more substantially.

Would it be cheaper to buy or rent in your area?

If you plan on staying in the same house for at least five years, it's worth considering whether buying or renting is the better choice for you.

One way to evaluate the benefits of buying your home versus renting is by calculating the price-to-rent or P/R ratio. This can be done by dividing the median home price by the median yearly rent price. If a neighborhood’s P/R ratio is high, it would be more expensive to buy than to rent; conversely, if the P/R ratio is low, it would make more sense to purchase a property instead of continuing to pay the going rate for monthly rent payments. It's important not to get discouraged by this equation, though. As a snapshot of market activity today, it may not account for long-term changes in home prices and rental rates as accurately as one might hope.

According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing house 10 years ago would have gained roughly $225,000 in equity while paying off the mortgage and maintaining stable housing costs.

That said, if a person had chosen to rent for the past 10 years instead of buying, they would not only have missed out on those equity gains, but also seen US rental prices increase by 66%.

Renting a house might seem economical today, but in the long-term, buying a home could be the better choice.

Are you ready to purchase or rent? Give us a call and we'll help you make the right decision based on your location and financial needs. We're experts in the local market and can help you interpret the numbers to make the right call.

Can I afford to buy a house?

If you find that buying a home is the better option for you, then you'll want to evaluate your financial readiness.

Start by considering your current savings. If the down payment and closing costs will take up all your savings, that may be a sign you're better off waiting until you have more money saved for an emergency fund.

When you buy a home, you have more than just your monthly mortgage payment to think about. You'll need to pay property taxes, insurance, association fees and maintenance. So when considering your monthly budget, don't forget these extra costs too.

One of the things we talk about in real estate is that you could find that owning is more expensive than renting, depending on the situation. Landlords often pass costs onto renters which make renting cheaper, but it's not always the best option.

When you buy a home, a lot of the upkeep comes from your pocket. That does mean that you get to reap the benefits of any major upgrades. For example, when you update your kitchen or bathrooms, it not only makes your home more livable and enjoyable; it also improves the value of your home.

If you are thinking of buying a home but aren't sure if you can afford it, give us a call. We can help provide you with a realistic assessment of your options and help determine whether homeownership is the right choice for you.

Will I qualify for a mortgage?

If you're able to afford the cost of homeownership, your next step will be to determine your eligibility for a mortgage.

Every lender uses different criteria, but at a high level, you're typically looking at job stability and credit history to make sure you'll be able to reasonably handle monthly mortgage payments.

Ensuring financial stability is important to lenders. If you're self-employed, you may need to provide additional documents that show the stability of your income. A lender will also compare your monthly debt payments to your monthly earnings and current debts in order to make sure you're in a healthy financial situation.

When applying for a loan, interest rates are determined by credit scores. The higher your credit score, the better your chances of securing a preferable rate.

Whether you know exactly what you're looking for, or are just getting started on the home-buying search, it's always a good idea to speak with a qualified mortgage lender before starting your search. If you're interested, we can refer you to a loan officer who'll help you find the perfect mortgage options.

How would living in a home of my own change my life?

Homeownership has several risks and benefits that cannot be seen by simply considering its financial rewards. Before you begin the preapproval process, make sure to consider the potential impacts of homeownership on your lifestyle outside of finances.

Purchasing a home can take more time and energy than renting one. There will be a lot of upkeep, specifically if you buy an older or outdated house that needs a lot of work. If you've only lived in apartments for years, for example, you could be surprised by the amount of time you spend maintaining a yard.

Some people might enjoy the prospect of a little DIY work in their new home, or maybe green because they love gardening. Maybe you'd like to play with your dog in the yard, or host gatherings for family and friends. You might also enjoy having a great place to come home to after being out and about, attending block parties with other committed homeowners.

The best thing about owning a home is that you can always do what you want with it. If you want to paint your walls fiesta red one month or eggplant purple the next, there's nothing stopping you.

You have the choice. Like your home, it's yours to decide what happens with it.

Do you have questions? We have answers!

When it’s time to buy or rent a home, you need to make your decision carefully. We're here to help you make the best decision for you by comparing your options with local market data. Since every person has different needs and goals, we offer customized consultations for a more personalized experience. Start today by reaching out and asking your questions—we'll be happy to help!

Buy Now or Rent Longer? 5 Questions to Answer Before Purchasing Yo...

Buy Now or Rent Longer? 5 Questions to Answer  Before Purchasing Yo...