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Rent vs Buy...Historically


You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.

A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.

But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:

“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”

The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):



So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.

Bottom Line

If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.


 

Your Local Mortgage/Sales Numbers

 


 

Escambia County


Escambia

Month

Closed Sales

% Change Year Over Year

Jan 2023

304

-28.0

Dec 2023

375

-31.7

Nov 2022

321

-31.1%

Oct 2022

438

-15.8%

​Sep 2022

459

-13.1

Aug 2022

518

-2.1%

Jul 2022

505

-9.8%

Jun 2022

592

-3.6%

May 2022

583

16.8%

Apr 2022

522

0.2%

Mar 2022

565

2.5%

Feb 2022

446

14.4%

Information from Florida Realtors

 

Santa Rosa County







Santa Rosa County

Month

Closed Sales

% Change Year Over Year

Jan 2023

228

-27.2%

Dec 2023

330

-30.2%

Nov 2022

281

-31.3%

Oct 2022

331

-34.5%

Sep 2022

373

-20.1%

Aug 2022

427

-15.3%

Jul 2022

410

-20.1%

Jun 2022

492

-11.5%

May 2022

447

-4.1%

Apr 2022

421

-7.9%

Mar 2022

460

-0.4%

Feb 2022

400

9.6%

Information from Florida Realtors

 

Plum Tree Real Estate Marketing

850.221.6442







 

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Skip Geiser LLC. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Skip Geiser LLC. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.


 



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