Rent or Buy - Count the Costs - Where Are Rents Headed

We're renting in the Woodinville area. We delayed our decision to buy a home because we're not sure where prices are headed. If we buy and prices continue to soften, we feel we missed the lowest price. Let's wait.

People bullish on real estate say buy now. Interest rates may start heading upward impacting your buying power. One or two percent up in rate will shrink the loan you can get and the size and quality of house available. The dream house might be out of reach.

Plus, if rates go up you'll pay a larger house payment.

Okay, we've heard that before. But interest rates look to remain low, so we'll just wait, thank you. If we sit and wait we can’t be hurt. 

In waiting we're assuming that a non-decision comes without consequence. Is that true? Are there negative consequences for the renter?

Hoping to save on housing costs by delaying (and buying at the bottom of the market) may result in the opposite ... higher housing costs in the interim.

If we continue to rent, we're looking at higher landlord invoices. Rental costs increase by 3% a year historically. We post a graph of how rental prices have increased recently and where they are projected to go over the next few years based on a report from Marcus & Millichap.

Currently, in most parts of the country, buying is less expensive than renting. Plus, we can lock in our housing expense for the next thirty years by buying now. We'll get a low price and a record low interest rate.

What will happen if we continue to rent?

If our family continues to rent, we could face a housing expense (rent) which will rise with the market. There are consequences for delay.

Thanks for considering this blog.