05 May . 2023
Is it better to rent or buy a home in Portland right now?
Whether you rent a 4-bedroom house or a studio apartment, you make a decision every year: stay in your current lease, move to a new rental, or throw off the shackles of renting and become a homeowner.
Over the past few years, you may have heard a lot of stories about buying a home being cheaper than renting, and that can be true depending on where you live and what’s happening with mortgage rates. But beyond this fluctuating variable, it’s important to understand the long-term benefits. In this blog, we gather advice from the experts to help you make the right decision for you and your family.
Perks of owning vs. renting
One of the biggest advantages that homeowners have over renters is control. When you take the exciting step of buying your own home, you lock in your monthly housing payment so you know exactly what to expect in the future. Renters, on the other hand, have no such protection.
This year in Oregon, landlords can increase rents by up to 14.6 percent. On a $1,200 apartment, that’s an increase of nearly $200 every month. So many renters are looking to the future with an eye toward purchasing a home of their very own. Just imagine the relief you could feel not having to worry about your rent going up—ever again!
Economic benefits of homeownership
As Freddie Mac says: “Monthly rent payments increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month…allowing you to budget wisely and make plans for the future.” You can also potentially write off a portion of your mortgage payment as a tax deduction.
Additionally, homeowners enjoy the benefit of home equity; the latest Homeowner Equity Insight report from CoreLogic shows that the average homeowner gained more than $34,000 in equity over the last 12 months. According to Zillow, home values in our Hillsboro zip code have gone up 4.1% in the same time period.
So, should you rent or buy?
To save you time, we’ve gathered 5 expert takes on this heavily debated question:
Fortune says: “Buying has almost always been favored over renting when it comes to housing. For some, renting is considered ‘throwing money away.’ The truth is, the answer to the rent-versus-buy question is much more nuanced. Lifestyle, age, work situation, desired location, and readiness to settle down are all factors that must be evaluated when choosing a place to live.”
U.S. News & World Report says: “Renting is a great option if you are unsure about the location. [But] your landlord might significantly increase your rent when your lease is up for renewal, or simply decide not to renew your lease. You are beholden to the landlord each time your lease is up, as well as reliant on them to handle any required repairs. If this is a community you want to join and a property you can make your own, you should not worry about timing the market perfectly.”
CNBC says: “The return on the rent you pay is essentially zero. Yes, in exchange for paying rent, you get a place to stay. But you have little chance of building equity.”
Real Simple says: “Purchasing a home can save you money on your monthly expenses…Sometimes the flexibility that renting affords is enough to make up for what you're paying in monthly costs. But if your goal is to take the most cost-effective route, it's important to compare all the numbers.”
Money says: “If you've locked in a fixed-rate mortgage, you can count on your monthly payment staying consistent for the loan term (typically 30 years). You can also borrow against your home's equity with a cash-out refinance, a home equity loan, or a home equity line of credit. Having access to this equity can help you meet larger financial goals like making home improvements, investing in more real estate, or consolidating high-interest debt. And finally, there are tax benefits that come with homeownership.”
As you can see, there is no one-size-fits-all answer to whether you should buy a home, or keep paying rent. But the builders at Reed’s Crossing are here, every day, to help you figure out your options so you can make the right decision. We can’t wait to meet you!
Still need more info? Stop by for a tour, check out our FAQ, or visit the Builder page to get in touch.
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