Are you wondering if buying makes more sense than renting especially in a time where both mortgage interest rates and inflation rates have increased significantly? Rents have continued to climb upwards since 1988 according to the census reports. Rents are much higher today than they were several years ago. Rents continue to increase and there is no indication that will change.
Nationally, the average rent for a 2-bedroom place is $1,901/mo. The Twin Cities metro area is somewhat less expensive. A recent review of current MLS rental listings for 3+ bedroom single family homes revealed 135 available rentals in Hennepin and Dakota Counties. There is only 1 listing below $2,000/mo ($1,995/mo, to be exact!) with the median available rental price of about $2,800/mo. The highest? $15,000 a month!
How does that compare to owning a $350,000 single family home? While the actual monthly payment will vary depending on interest rates, down payments and property taxes, you can expect to pay about $2,500-2,600/mo for a $350,000 home. And the mortgage payment will stay the same for the next 30 years while rents continue to increase!
So, if you are looking for a place larger than a 2-bedroom, you may find it less expensive to own! In addition to shielding yourself from rising interest and inflation rates, owning your own home also allows you to start building wealth and increasing your net worth. Many cities have special loan programs, too, which can significantly reduce the money you need up front for down payment and closing costs to get into a home.
Historically, home values rise over time and you also pay down your mortgage. This builds equity in your home and is the number one wealth building tool for most Americans. If you have questions or need more information, please contact us. And remember – even if you rent, you are still paying someone’s mortgage; isn’t it time that the mortgage you pay was yours?
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