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Own vs. Rent: When is the Best Time to Buy a House?
Updated on July 3, 2024
Owning a home is part of the American dream, and taking that next step requires planning. Your financial stability, personal goals, lifestyle, and the current market all play a part in this decision. Weigh the pros and cons of renting versus buying a house to decide when you’re ready for your first home.
Pros & Cons of Renting
The upside to renting is paying a fixed amount that’s often less than a mortgage after you add on insurance, maintenance, property taxes, and utility bills. If you’re renting an apartment or condo, you may also have a pool, fitness center, and other amenities at your convenience without paying maintenance or Homeowners Association (HOA) fees. At the end of your lease, you also have the flexibility to move much easier than selling a house.
The downside to renting is that you’re missing out on building equity and other tax benefits. Most landlords restrict renters from painting walls or making renovations, limiting their ability to make the space their own. When repairs are necessary, you’re at the mercy of the owner’s timeline, which may not be as soon as you’d like. Some rental properties do not allow pets or may have other restrictions. Owners can increase your rent at the end of your lease, sell the property to a new owner, or evict you at their will.
Pros & Cons of Buying
Owning a home is one of the biggest investments you’ll make, and it provides a sense of stability and pride. Your home is an asset to build equity and improve your credit score. Because you have control over your living space, you can decide when to make renovations, repairs, or redecorating. Some home-related expenses are eligible for tax deductions, including mortgage interest, property taxes, insurance payments, or improvements.
“If I were asked to name the chief benefit of the house, I should say: the house shelters daydreaming, the house protects the dreamer, the house allows one to dream in peace.”
— Gaston Bachelard, French philosopher 1884–1962
Buying a home requires upfront expenses to consider, including the down payment, closing costs, property taxes, and other fees. Insurance premiums are usually significantly more for homeowners than renters, and homeowners also have additional repair costs not covered by insurance. Read about HOA fees, maintenance costs, and more in our article, “4 Expenses Added to Your Mortgage”. As a homeowner, you have less flexibility in moving, and you may not sell when you want, depending on the market. Real estate agents recommend staying in a house for at least five years to ensure you’ll make a profit from selling.
Best Time to Buy
When you’re ready to make your first big move, consider your financial readiness and all that homeownership brings. Read more in our article, “How Much House Can I Afford?”
The best time to buy a house depends on your location, the housing market, and the time of year. For the location, research the area where you are looking to buy and the market trends. Some neighborhoods have higher prices and property taxes because of the school district zones.
As for the housing market and time of year, spring and summer are the most active, meaning there are more homes on the market. However, research shows buyers often pay above market value in April, May, and June. For the lowest prices, shop in the winter or fall. Because these are slower seasons, a seller who has to list their house is more motivated to accept offers. Real estate agents are also more driven to make sales during slower months, making them more open to negotiating closing costs. There may be less inventory in these seasons, but if you keep an open mind, you may find a deal that’s right for you.
Buy Your First Home with Help From Texell
Buying a house is a big step, and Texell’s Home Loan Heroes are ready to guide you from start to close. Our First-time Homebuyer program helps achieve homeownership with lower monthly payments and no private mortgage insurance.1 This loan also allows down payments as low as 3%2, and gift funds are accepted for the down payment or closing costs3. Learn more at TexellHomeLoans.com or call 254.774.5104 to get started today.
NMLS# 460152
1 With approved credit. The First-time Homebuyer program is available for single family residence where at least one of the homebuyers is a first-time homeowner, and homebuyer education is required. Must have a minimum 700 credit score and loan amount cannot exceed $500,000. Other restrictions may apply.
1 With approved credit. The First-time Homebuyer program is available for single family residence where at least one of the homebuyers is a first-time homeowner, and homebuyer education is required. Must have a minimum 700 credit score and loan amount cannot exceed $500,000. Other restrictions may apply.
2 If loan-to-value is greater than 80%, borrowers must contribute at least 3% verified personal funds.
3 Gift funds may fund all or part of the down payment or closing costs.
3 Gift funds may fund all or part of the down payment or closing costs.
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