The Old Buy vs Rent Question

[ChiGuy2.5]

Originally Posted by StuartM1

Thanks Norty! I'm still here, renting a room. This arrangement has been relatively inexpensive over the last 12 + mos but certainly takes a toll on quality of life. You never realize how much you just want to cook in your own kitchen, or binge watch tv on your own furniture on a rainy day...until you can't. It's the simple things, especially as we all age, right?

As many of us know, rates are up near 7%. Listing purchase prices have eased just a bit. Demand in the form of prospective buyers at open houses has decreased a lot but could be just due to the season and/or fewer folks looking to sell if they must then borrow at these high rates. I've also bumped up purchase price to ~$415K. (Plus HOA fees ~$400/mo.)

Rents: Rents are still CRAZY high. $2,300/mo. plus utilities.

Having trouble convincing myself that renting is the way to go. Sometimes think i'd rather just roll the dice and buy. And if rates hit 9%+ in the spring I'll look like a genius. lol. And we might not see significant reductions in rates or purchase prices for years from now. Then again...what if the bottom falls out and prices drop 20%+ in the next two years - making buying a costly mistake.

Definitely excited in a good way! Looking forward to getting back into my own private clean comfortable space with a kitchen and private bath, either renting or buying. One positive is having learned how little space i need to be comfortable. Very excited for the next place, right or wrong.

Thank you to all here for the great advice. Seriously. But keep chiming in as I believe there are many others in very similar situations, on the sidelines, between homes, in this incredible market.

Are you taking into account the costs of a real estate transaction? If your timeline is ~3 years then you won't even make up for the loss in broker commissions by buying (e.g. 2.5% of a modest $500,000 is still over $12K). You're much better off renting especially if you consider the interest earned on the down payment you would have spent to buy. NOTE, there are high yield savings accounts returning 5% today.

Also, there are still deals when renting. All over the country people rent just above their mortgage costs so hopefully you can find a mom and pop landlord who just wants to cash flow without gouging the tenant. Even if you pay an inflated rent that's higher than the mortgage, your timeline still doesn't make buying a house make sense.

Figure out where you want to be permanently and buy then, don't do it to bridge locations.