Owning a home is a big decision and one that’s not for everyone. But with rent on the rise, it’s a good time to at least consider purchase a house. According to some data on rental rates, there are 25 metropolitan areas in the US where rent on the rise should indicate it may be time to look into owning rather than renter.
Rent vs. Own
Four key factors in the decision to rent or buy:
- Putting down roots. If you are not sure that you will stay in your current city for long, then of course it makes sense for you to rent and stay flexible. If you are planning to stay where you, it is worth looking into the benefits of buying a home.
- Stability of family situation. Similarly, if you have yet to make decisions such as marrying or raising a family, it may not be time to commit to a type of residence. Once those factors stabilize, you will have a clearer idea of the type of housing you want in the long-term.
- Locking in housing costs. Besides the immediate month to month comparison costs, it is important to consider that a fixed-rate mortgage can stablize your housing cost and may allow you to better budget and prepare for your future.
- Building equity. Because renting does not allow your monthly payments to go towards building equity. When you build equity, you are essentially paying yourself. When you pay rent, you pay the landlord.
Where Fast-Rising Rents Should Get You Thinking About Buying a Home
Altisource Portfolio Solutions provides the RentRange reports on rental market conditions, and recently released a list of the 25 metropolitan areas with the fastest increases in year-over-year rent rates. The following are those markets, along with the percentage increase in rental rates during 2015.
|Rank||Metropolitan area||2015 Change in Rent|
|1||Cape Coral-Fort Myers FL||25.4%|
|2||Shreveport-Bossier City LA||19.6%|
|3||New Orleans-Metairie-Kenner LA||15.1%|
|4||Deltona-Daytona Beach-Ormond Beach FL||14.9%|
|5||North Port-Bradenton-Sarasota FL||13.6%|
|6||Port St. Lucie FL||13.3%|
|7||San Jose-Sunnyvale-Santa Clara CA||12.1%|
|8||Providence-New Bedford-Fall River RI-MA||12.1%|
|9||Little Rock-North Little Rock-Conway AR||11.4%|
|11||Charleston-North Charleston SC||10.6%|
|12||Los Angeles-Long Beach-Santa Ana CA||10.0%|
|13||Kansas City MO-KS||9.9%|
|21||Dallas-Fort Worth-Arlington TX||8.2%|
|22||Oxnard-Thousand Oaks-Ventura CA||7.9%|
|23||San Diego-Carlsbad-San Marcos CA||7.8%|
|25||San Francisco-Oakland-Fremont CA||7.7%|
The Wake-Up Call
These rent increases should naturally get your more concerned about buying a home. Naturally, these rising rents are out of the control of the renter. In these places, they could be forced to move out of their current unaffordable, and in some cases they could be forced out of an area altogether.
This goes beyond financial hardship. Being priced out of an area can affect your job prospects and disrupt children who are established in a school district. Buying a home can stabilize the situation, giving you more control over your finances and your future. For renters in these cities, the wake-up call has sounded.