Privacy, proximity to family and
friends, ambiance, environment and a sense of community all contribute to the
emotional side. Tax breaks, transportation, amenities, and the opportunity to
build equity are also factors. But the number one reason people buy homes is
the desire to own a home, with the desire for more space a close second.
For most households, renting is less
of a financial stretch than buying a home. Even in the best of times,
homeowners must come up with a substantial amount of cash to cover the
downpayment and closing costs, as well as be prepared for upcoming repairs and
maintenance. While renters typically have to pay a security deposit plus the
last month's rent, the total outlay is usually more modest than the upfront
costs of buying. Equally important, renters who want to move do not incur the
steep costs associated with selling a home.
Renting also brings greater
certainty to household budgeting because tenants do not have to cover the costs
of unexpected but necessary home repairs. Owning a home, however, requires
money, time, and skill to manage its upkeep. Renting transfers responsibility
for maintenance to a landlord, reducing risk and worry for those who prefer to
avoid these obligations.
Beginning in 2009, the edge began to
move to homeownership. Due to still-low home prices and rising rents, The
Center for Housing Policy predicted that home buyers who purchase can build
equity within four years, about the same length of time it takes to recoup
closing costs. The reason building equity is important is that you can take
money out of the home when you leave, which is not possible for renters.
One of the disadvantages of renting
is that rents can go up. If you get a fixed-rate mortgage, your costs will stay
the same, although hazard insurance and property taxes can rise. However,
rental insurance can rise, too.
Renting is a convenience and a great
hedge when property prices are spiraling downward, but for long-term gain, tax
benefits and equity is a better bet.
Privacy, proximity to family and friends, ambiance,
environment and a sense of community all contribute to the emotional side. Tax
breaks, transportation, amenities, and the opportunity to build equity are also
factors. But the number one reason people buy homes is the desire to own a
home, with the desire for more space a close second.
For most households, renting is less of a financial stretch
than buying a home. Even in the best of times, homeowners must come up with a
substantial amount of cash to cover the downpayment and closing costs, as well
as be prepared for upcoming repairs and maintenance. While renters typically
have to pay a security deposit plus the last month's rent, the total outlay is
usually more modest than the upfront costs of buying. Equally important,
renters who want to move do not incur the steep costs associated with selling a
home.
Renting also brings greater certainty to household budgeting
because tenants do not have to cover the costs of unexpected but necessary home
repairs. Owning a home, however, requires money, time, and skill to manage its
upkeep. Renting transfers responsibility for maintenance to a landlord,
reducing risk and worry for those who prefer to avoid these obligations.
Beginning in 2009, the edge began to move to homeownership.
Due to still-low home prices and rising rents, The Center for Housing Policy
predicted that home buyers who purchase can build equity within four years,
about the same length of time it takes
