A good 57% of renters agree that the American Dream of owning a home is dead, according to a recent Guardian-Harris Poll. And it's easy to see why you might feel similarly.
Now you should know that today's housing market conditions aren't going to last forever. So in time, it could get easier to buy a home.
But even if that doesn't happen, there's nothing wrong with renting a home on a long-term basis. In some cases, being a life-long renter might actually benefit you financially.
Don't assume things won't improve
A big reason home prices are elevated today is that there's not a lot of inventory to choose from. And the reason there's not much inventory is that many homeowners refinanced in 2020 and 2021 when mortgage lenders lowered their rates significantly. So now, people with 3% mortgages don't want to swap them for loans in the 7% range, which is what buyers are looking at today.
You're not doomed if you end up a life-long renter
When you rent a home, you pay a single amount of money each month for the duration of a given lease. You don't have to come up with $3,000 on the spot to replace a broken water heater, and you don't have to pay a snow removal service $150 every time there's a storm.
In fact, if you take all of the money you're saving each month by not having to pay for maintenance and repairs on a property, you could invest it and grow yourself a lot of wealth without having to deal with the hassle of owning a home.
Let's say renting costs you $300 less per month over a 30-year period than buying a home. If you invest that money at a 10% average annual return, which is consistent with the stock market's average, you'll end up with about $592,000.
Comments