Why It May Be Smarter To Rent Than Buy in 2024
Written by
Jordan Rosenfeld
Edited by
Molly Sullivan
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If you’re renting right now and want to buy a home or feel frustrated that you can’t yet, don’t stress, 2024 may be a good year to hang onto your renter status a bit longer.
The real estate market has been in fluctuation this past year, with a housing shortage driving up the prices of homes, and interest rates remaining higher than they’ve been in a while.
Real estate experts explain why it may be smarter to stay renting than to buy this year.
If You’re Saving for a Down Payment
Renting is a more cost-effective alternative for individuals saving for a down payment or making other investments because you don’t have to worry about house upkeep issues, unlike with owning a property, according to Ron Wysocarski, real estate broker and CEO with Wyse Home Team Realty
Rents May Be Dropping
“Furthermore, word on the street is that rent rates will be declining, particularly with the inflow of new apartment complexes projected to appear this year,” Wysocarski said.
This could be welcome news if you’re currently renting, he said.
“You can benefit from significant financial, time and convenience savings. Even if you’re thinking about becoming a homeowner, renting for an additional year might allow you to try some new pastimes without committing.”
Renting Comes With Fewer Headaches
Additionally, without dealing with the headache of buying, selling or owning a property, you may pack up and relocate for that ideal job or just a change of scenery, Wysocarski said.
“And what’s the best aspect? Bid farewell to the strain of maintaining and repairing your property. Your landlord is responsible for replacing or repairing any damaged or broken items, so you don’t have to worry when something goes wrong.”
Interest Rates May Stay High
Jonathan Faccone, managing member and the founder of Halo Homebuyers, feels confident that long-term mortgage interest rates will rise and remain high, which will put potential homebuyers with insufficient credit scores in a tough spot to qualify for a mortgage.
“[T]he benchmark 15-year fixed mortgage rate has risen to 6.45%, marking a 13 basis point increase since January 2024,” he said.
Monthly payments for a $100,000 loan at this rate would be around $868, he said, (and few homes are as low as $100,000).
“Renters quickly adapt to economic changes and market fluctuations by simply moving to another rental property or location,” Faccone said.
Faccone foresees that the monthly housing payments in 2024 will be higher than they are now due to rising mortgage rates and property taxes.
A Scarcity of Starter Homes
As long as interest rates stay this high, renting is going to be especially attractive, especially when you factor in the scarcity of starter homes, according to Martin Orefice, CEO of Rent To Own Labs, an online resource guide for renters.
“Investment firms have been buying them up so quickly that the prices are staying high and available inventory is staying low. This means buyers have to buy more home than they need, at the highest interest rates in decades,” he said.
Renting looks “pretty darn good by comparison,” Orefice said, at least as a temporary measure.
Of course, in the long term, if you can get over the price and the financing, homeownership is still the way to go.
Changing Lifestyle Preferences
If you’re someone who values flexibility and experiences over the traditional notion of owning property, you may find that renting just works better with your lifestyle, according to John Ridgway, certified property manager, CEO and founder of Celtic Realty Advisors, an investment and property management firm.
“Renting aligns perfectly with this mindset, offering the freedom to travel, change cities for career opportunities, or simply experience different neighborhoods.”
More Financial Flexibility
“Cost is arguably the primary reason why buying a house in 2024 may not be the best decision,” according to Seamus Nally, CEO, TurboTenant. “You aren’t locked in at one location indefinitely or with a bad mortgage.”
While the housing market is projected to start slightly improving for buyers this year with prices beginning to decline for the first time in years, Nally said that still likely won’t make much of a difference just yet.
“It could be wise for prospective buyers to wait until 2025 or 2026 because prices could be better then. Regardless, I think prospective buyers benefit themselves by monitoring home prices — looking for patterns and seeing if a deal pops up that they are willing to try for.”
When There Are Too Many Buyers
Additionally, if the housing market improves, this will likely mean many more buyers on the market, Nally said.
“When there are more buyers than sellers, would-be property owners either get burnt out trying to find a fair deal or may have to settle for less-than-ideal contract terms.”
Consider the Numbers
You also have to consider the numbers, Nally said.
“How much of a down payment would you need to save, and what would your monthly mortgage payment be? How does that compare to your monthly rent?”
If renting is much more affordable, he said, then it may make more sense to continue down that path.
“If you’re committed to staying in the area and your costs are comparable, building equity through homeownership could be a great option.”
Lastly, the costs don’t end after your closing papers are signed, Nally pointed out.
“If you’re not handy, the idea of being solely in charge of maintenance for your house may be enough to keep you renting forever. When you own, you either DIY your property fixes or hire a contractor to take care of things for you, which can add up, particularly for bigger projects.”
In short, renting allows a certain amount of flexibility and built-in support that homeownership lacks — so take your time deciding your next move.
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