Did you know? According to the Federal Reserve’s latest Survey of Consumer Finances, homeowners have 44.5 times more net worth than renters. As of 2016, the median net worth for homeowners was $231,400 (a gain of 15% since 2013), compared to $5,200 (a loss of 5%) for renters. Among U.S. families who own rather than rent, a primary residence accounts for 90% of total wealth. For the bottom 20% of low-income earners, home ownership may even account for 99% of total wealth.
Should you rent or buy?
More times than not, the answer to this question is a strong recommendation to buy (for the reasons cited above). With this said, there may be times and situations when renting may make more sense. For example, a person that is being relocated to a new area for a job may want to rent for the first year. The reason for this is multifaceted. For starters, they may not like the area that they have relocated to or perhaps that job is not what they thought it would be? In these times of uncertainty, it may be wise to test the market by renting. Should you decide that you’d like to stay in the area, this will give you time to consult a real estate professional and learn more about the market. In addition, this will also provide you the time to explore the various neighborhoods and areas that you may want to ultimately buy in.
The overall housing outlook may also play a significant role in deciding whether or not to purchase a home. Although nobody has a crystal ball for the real estate market, various market factors such as a potential looming recession may become critical items to watch. Another factor to consider is the amount of rent that you will be paying over a year or more. For example, if the monthly rent were $3,000/month over 12 months, you will have spent $36,000. After two years, this amount would add up to $72,000. It is at this point that you would need to ask yourself if you would have been better off buying instead of renting. Of course, if the home price for a property you would’ve bought would have dropped by more than 72,000 after two years, then renting may have been a better option. On the flip side, if home prices increase over these two years, then you would certainly have done better by purchasing a home.
Over the long haul, the wealth accumulation benefit of owning a home can not be ignored. It should be part of every American’s ultimate plan, if feasible. To add to this, South Florida continues to be one of the most highly desirable locations to live in the country. This should make you feel even more comfortable about buying a home in Palm Beach, Broward, or Dade counties.
If you have questions regarding the South Florida housing market or need assistance with formulating a plan to accomplish the dream of home ownership, do not hesitate to contact Live South Florida Realty, Inc. today! We have experienced and knowledgeable real estate professionals ready, willing, and able to assist you!