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Buying a home isn’t right for everyone. Read on to see if renting is a better idea for you this year. [[{“value”:”
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There are plenty of good reasons to want to buy a home rather than rent one. For one thing, as a homeowner, the money you pay into your mortgage helps you build equity in an asset you own. And also, as a homeowner, you don’t have to follow a landlord’s rules. This means that if you want to paint your walls neon green or adopt a 110-pound dog from your local shelter on a whim, you can.
But in some cases, renting can be a more financially and logistically sound decision than owning. Here are a few signs that you should stick to renting in 2024.
1. You’re worried about job security
Although the U.S. economy and job market are both in pretty good shape, there have been plenty of reports of layoffs to start off 2024. If your company recently had a round of layoffs, and you’re anticipating further cuts, then you may want to continue renting this year and wait for things to calm down.
First of all, if you apply for a mortgage and are laid off during the process, your mortgage lender may not let your loan go through. Also, getting laid off could constitute a huge hit to your income.
Owning a home can be a financial strain when you’re earning your regular paycheck. But imagine how stressful it might be to commit to a home only to then lose your job and find yourself bringing in a lot less in unemployment benefits while you look for work.
2. You don’t have a lot of money to put down on a home
In January, the median existing U.S. home sold for $379,100, according to the National Association of Realtors. That means it might take a large amount of money to come up with a 20% down payment on your home purchase.
Now, it’s possible to get a mortgage without putting down 20%. But in that case, you’re generally looking at also paying for private mortgage insurance. This is a costly premium you pay to protect your lender that only adds to your ongoing expenses.
Furthermore, if you don’t have a lot of money saved in general, you might leave yourself short on funds for a home-related emergency. Remember, when you buy a place of your own and the fridge dies or the water heater stops working, that’s your financial problem, not your landlord’s. So if you don’t have a lot of money in your savings account, you may want to stick with renting for the time being.
3. Your schedule is too jam-packed to handle maintenance
The nice thing about renting a home is not having to do any work to maintain it. When you own a home, the opposite holds true. But if you’re a super busy person with a demanding job, you may not have the time needed to maintain your home. And in that case, one of two things might happen.
You could either ignore routine maintenance and risk causing damage to your home, or you could not ignore the problem and outsource that work instead. But in that case, you’re looking at paying a lot more for maintenance than if you were to do the work yourself. And that could put a strain on your budget.
There are definite benefits to owning a home rather than being a renter. But if these scenarios apply to you, you may want to consider renting for the remainder of the year. You can always reassess in 2025, depending on factors like your job situation, savings level, and schedule.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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