While renting can be a solid choice while saving for a down payment, recent findings show that homeownership is still the better deal. The cost of renting is rising faster than any other time in the last six years, according to the Bureau of Labor Statistics, while rental inventory stands at a 20-year low.
While rising rents and lack of inventory might nudge renters into buying a home, National Association of Realtors® Chief Economist Lawrence Yun points out that tight credit standards, student debt, and the growth of multigenerational households are contributing to the lowest number of first-time home buyers in decades (as shown in the 2014 NAR Profile of Home Buyers and Sellers). Additionally, rising rents mean less money to put away for that down payment. Even with these difficulties, Yun projects first-time home buyers will be more active in the 2015 housing market, freeing up some of that rental inventory.
Check out RealtyTrac’s study to see all the places in the nation where buying a home is still more affordable than renting. Take a look at Yun’s 2015 housing market projections to see what might be in the cards for home buyers. Talk to Realtors® in your community to find out what they are seeing in the rental and buying markets.