this post was submitted on 02 Nov 2023
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Renting can absolutely make sense, and it makes more sense in some areas than others.
But generally speaking, it's better to rent if you're going to move frequently or your lifestyle could change suddenly (i.e. you want to have kids), and it's better to buy if you're going to stay put. Changes in lending rates, housing prices, and rents just shift how long you need to "stay put" to come out on up, but something like 5 years is a good rule of thumb (I'll need to look through the article's math).
So yeah, do the math your for situation and area. In most areas, buying is the better choice financially speaking, but there are plenty of exceptions. One important thing to note is that rent changes year over year, but mortgages stay the same (insurance and taxes can change though), so generally speaking, rents usually exceed your mortgage after some years.
Or you can afford it. I am living in a city where the average salary is the same as the average mortgage for a 3-room flat. It is absolutely crazy, a city with one of the highest real estate bubble indexes in the world, and a bubble that refuses to burst stubbornly and things are getting progressively worse.
Not to mention that you are also supposed to have 10% of the price + real estate agency fee, plus cover the initial taxes and governmental fees in order to get an better mortgage rate. It is absolutely sickening.
Mission impossible!
It certainly does depend on where you live.
In my area, a condo/townhouse goes for $400k give or take ($3500/month @ 0% down over 30 years), and the median household income is ~$75k (~$6k/month before tax, ~$5500 after tax). So that's something like 55-65% of net income, which isn't ideal, but still possible.