Does Owning a Home in Today's Market Make Sense Financially?

Does Owning a Home in Today's Market Make Sense Financially?

Although owning a home is the typical “American Dream”, does it make sense financially? The decision should be well thought out using your head and not your heart. According to Suze Orman, a certified financial planner professional, “The decision to rent is at an all time high.” The decision should be based on personal and financial needs. Although, according to an article in Investors Business Daily, “Renting now makes sense in many markets — even for the very prosperous.” If your job requires you and your family to relocate at any given moment with no guarantees of staying in a location for a lengthy amount of time, then the answer is clear, rent. This is not the only reason it is better to rent.

While you are renting a home, your landlord is responsible for repairs. You should know the costs of owning a home and how much of a house you can afford before making the decision. Home repairs can add up over time, even a short time. Plumbing repairs, electrical repairs, structure repairs can be quite expensive. Also, natural disasters can occur at any given moment. A tree falling onto your home can cost several thousand dollars. When any of these arise, the costs can wipe out a savings account in a hurry.

Just because you can afford a monthly rent amount of $1000.00 a month, don’t assume you can afford a monthly mortgage of the same amount. Most new homeowner’s underestimate their monthly costs. Other costs that incur when owning a home are property taxes and homeowner’s insurance. Each of these would not be your responsibility when renting a home. Renter’s can purchase renter’s insurance for a fraction of the cost of homeowner’s insurance.

The market today has made it hard to earn a profit when selling your home. In a buyer’s market, homeowner’s are losing money and regretting their decision to buy a home. Housing costs are on the rise. The decision to rent or buy a home should not be made lightly. Renting equals freedom.

Yahoo Personal Finance Special Edition., Money Matters with Suze Orman
NORM A. Renting A Home A Better Deal Than Buying In Much Of U.S. Investors
Business Daily [serial online]. December 29, 2009:A01. Available from: Regional Business News, Ipswich, MA. Accessed May 30, 2011.