Buying a home has long been part of the American dream. For many, it’s a major milestone that often turns out to be the largest purchase they’ll ever make. Plus, owning a home allows people to not only take pride in ownership, but also helps to build equity for the future.
It’s become much more expensive to become a homeowner, though. Home prices are elevated and interest rates are up from last year, which can tack on thousands, if not tens of thousands in mortgage interest and lead to higher monthly payments. During the third quarter of 2023, monthly mortgage payments on a single-family home increased to $2,051 compared to $1,837 a year ago.
However, the huge expense is not the only reason some people are opting out of the traditional American dream of homeownership. GOBankingRates interviewed two professionals who said they are never going to buy a home. Here’s why.
Maintenance and Repairs
“Homeownership comes with the responsibility of maintenance and repairs,” said Sammie Ellard-King, founder of personal finance website Up The Gains. “By renting, I avoid the stress and costs associated with fixing a leaky roof or a malfunctioning HVAC system. Instead, these issues are typically the landlord’s responsibility.”
Dr. Mollie Newton, founder of PetMe Twice and Doctor of Veterinary Medicine said that as much as she adores fixing up a furry friend, when it comes to home repairs — not so much. “Renting often means your landlord handles most maintenance issues, which suits me just fine,” she said.
You should reportedly expect to spend 1% to 4% annually of your home’s value on home repairs and maintenance. So a $400,000 home would require you to spend $4,000 to $16,000 annually. That’s potentially a huge chunk of change on top of your mortgage payment.
Location and Lifestyle Freedom
Ellard-King said, “Renting allows me to live in areas where buying a home might be financially out of reach. It’s also a great choice for those who prefer the freedom to move to different neighborhoods or cities without the hassle of selling a property.”
In some cities, monthly rent can be at least $1,000 less than what it would cost you to pay a monthly mortgage.
Newton said that renting offers her the freedom to move without the burdens of selling a property. “Whether it’s chasing a new job opportunity or simply a change of scenery, I value this adaptability,” she said. Newton also said that life is unpredictable and she finds that renting offers the flexibility to adapt to life’s changing circumstances without the weight of a mortgage.
Lower Upfront Costs
“While homeownership often requires a substantial down payment, renting typically involves lower upfront costs,” said Ellard-King. “This makes it a more accessible option for people who don’t have significant savings.”
A typical down payment for first-time homebuyers was 6% in 2022, according to the National Association of Realtors. For a $400,000 home, that’s $24,000. A security deposit to rent a home or apartment could be one to three times the rent amount, which is significantly cheaper.
“Renters usually have more predictable monthly expenses,” said Ellard-King. “Rent and utilities are typically consistent, whereas homeowners may experience fluctuating costs like property taxes and unexpected repairs.”
Homeowners may also have higher utility bills — especially compared to those who live in apartments, which are generally smaller than homes.
Real Estate Market Uncertainty
Ellard-King pointed out that the real estate market can be unpredictable. “Renting allows me to avoid the risks associated with market fluctuations and potential depreciation in home value,” he said.
And it’s not only the market that might cause your home to depreciate, it’s also how well you maintain your home. If you fail to keep up with repairs and maintenance, your home will lose value.
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