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Question:


Is buying a home a better financial move than renting one? If so, why? I’ve heard many conflicting answers about this.
-RichmondTia


Answer:


One reason for the conflict is that the answer varies from person to person. Some realities of the real estate market affect everybody, but not always in the same way or to the same extent. Here are some factors to mull over:
 
Are you planning to hang around for a while, or do you expect to move in the next few years? Before you answer, you have to consider whether you and all others in your household who work are content and safe in their jobs. Also, are you likely soon to have children or long-term houseguests, making your living arrangements cramped?
 
Then there is the matter of money for a down payment. Do you have enough to ensure that you’ll be able to cover your mortgage payments and that you won’t slip underwater and owe more than your home is worth? You could roll the dice and make only a small down payment in the hope that your home’s value goes up. But at a time when so many homeowners are rolling snake eyes, do you really want to take that chance with your primary residence?
 
If you can stand the short-term price swings and if you’re sure you’re going to be staying put, then buying seems to make more sense than renting. Mortgage rates are as low as they have been in decades, and home prices have plunged to levels not seen for many years. That combination should bode well for long-term affordability and security, with strong returns thrown in for good measure.
-Conrad de Aenlle



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