Renting vs. buying a home: What’s best for you?


Rent versus owning a home

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When determining whether or not you’re ready to be a homeowner, there are a number of factors to consider — several of which are personal, and hinge on exactly where you want to live.

“Many property experts would say that there are parts of the country where renting outweighs the costs of ownership,” says Brian Sergi-Curfman, a Realtor in Pittsburgh. “Potential buyers or tenants may find themselves in markets that are depreciating or, conversely, in areas where values have priced them out of the housing market. The decision to rent or buy should be influenced not only by market trends but by the client’s long- and short-term goals.” 

Sheryl Grider Whitehurst, regional vice president for the National Association of Realtors, says home ownership rates are declining, having reached a peak at 69.4% in 2004. In the first quarter of 2015, the home ownership rate was 63.8%, which is the lowest it’s been since 1994.

“Young people are delaying buying a home due to student debt,” Grider Whitehurst says. “They just aren’t earning enough to carry a mortgage and the debt. Another factor is the economic crisis that occurred in 2007. People started losing their properties and have to get their finances in order to buy property again.”

And yet nationally, buying a home is 35% cheaper than renting, according to Trulia.com. With 30-year mortgage rates available below 4%, home ownership appears more affordable than many might think.

The economics of where you live certainly weigh heavily on the decision to buy or rent, but what other factors should you consider?


The pros and cons of renting

After 20 years of owning a three-bedroom, three-bath, two-story home on a steeply sloped lot, empty nesters Gay and Harry Stephens were ready to downsize. They now live in a two-bedroom, two-bath apartment in a building that was once an all-girls Catholic school in Newport, Kentucky.

“We wanted to rent because it’s easier to take care of and we have the ability to turn the key and walk away when traveling,” she says. “There’s no yard work, and someone else is now responsible when there are maintenance issues.” 

Gay Stephens says the couple also likes their location and accessibility to favorite restaurants and entertainment venues in Northern Kentucky and downtown Cincinnati.

“I was surprised how much I enjoy urban living,” she says, adding that there are some negatives to renting, such as slow response times for repairs and not building equity through their housing costs.

Other disadvantages to renting can include unanticipated rent increases, non-renewal of a lease, and not being able to customize the living space.

“On the other hand, you’re not tied to the property nor do you have to come up with a down payment and closing costs to live there,” says Realtor Josh Bushner in Austin, Texas. “If you’re new to a city or not sure you’ll be there for longer than three years, I usually recommend renting until you’re certain you’ll be staying longer. Also, make sure coming up with a down payment won’t put you in a cash-strapped position. Take time to get familiar with a city and find neighborhoods that will meet your lifestyle.” 

Elizabeth Cales of Clarksville, Tennessee, says that despite being financially secure enough to purchase a home, she’s happy to rent.

“It’s a buyer’s market here,” she says. “You can get a mortgage for $650 a month, which is what we pay in rent, but with my husband’s work we’re not sure we’ll be here in three years. We don’t want to take a loss on a house we might not be able to sell.” 

Cales says one of her favorite aspects of apartment living is the close-knit community, so much so that the Angie’s List member gave her complex a positive review. “The neighbors are all close and it’s just nice,” she says. “I feel more secure having people around.”