With everything from low inventory and extreme buyer demand to supply shortages affecting the housing market over the last 12+ months, the rental market has become a more viable solution for those seeking a new living space.
There are the obvious benefits to renting versus buying – you don't have to shoulder the burden of maintenance or repairs, you're not bound to a multi-year mortgage, and you won't have to worry about any unexpected expenses. But even beyond those tangible perks, there exists perhaps the greatest benefit of all: renting may be less expensive than buying right now.
The Cost of Renting
A recent study conducted by LendingTree compared renting costs to the costs of home ownership across 50 of the country's largest cities. The study revealed that in each of the 50 cities, renting was more affordable than buying a home with a mortgage.
Renters in these metro hubs spent on average $606 less than homeowners, including utilities, taxes, and fees. Of course, where you live still impacts just how much you save. New York City renters, for example, saved well over $1,000 each month, while renters in Orlando, Florida saved just under $300.
Home Prices Increasing & Supply Shortages
In 2020, the housing market underwent a tremendous shift as a result of the Coronavirus pandemic. A massive inventory shortage meant there were fewer homes available for sale, even while motivated buyers persisted. Each home that hit the market drew large crowds of interested buyers, each submitting escalating offers to beat out the competition.
Naturally, house prices rose, further tightening the pressure on buyers. Meanwhile, shortages of supplies like lumber and even appliances affected the housing market as well, reducing the number of new homes that could be built.
New apartment buildings, on the other hand, continue to pop up. According to The Hill, 26 of the country's largest cities have added more than 10,000 new rental units in just the last year. That pace isn't expected to slow significantly in the near future, either.
Renting May Just Be the Best Option
The cost of new houses compared to renting, limited supply of homes for sale, and the pressure of being a buyer in the current market are all factors which tell us that renting may just be the best option for those seeking new dwellings right now.
Even if buying a home remains a goal for you, it's worth considering renting for the time being. If you're wondering what's out there for renters, check out Watson Property Management's selection of listings.