The housing market in Erie is shaping up to be one of the most competitive markets to date. This is partially due to the COVID-19 pandemic continuing to influence the national real estate boom; for example, housing costs increased nine percent between 2019 and 2020. This unique global situation also reminded many of the importance of having a large, safe space to utilize when remote working and virtual learning became the new norm. Of course, potential job loss, relocation, and an unstable economy also played a part in making home buying difficult for many Americans.
The question remains: should you buy a home this year? You may be surprised when comparing the current benefits of renting vs. buying. Home prices continue to rise faster than rent prices, and it’s been speculated that the current market bubble is closely mirroring the 2007/2008 housing market crash, when millennials were shopping for homes out of a fear of missing out. Unfortunately, these purchases cost them more than expected as many were subjected to foreclosures.
In order to determine the best option for you, we recommend consulting a Buy vs. Rent calculator to crunch the numbers for both your short-term and long-term investments. Between rising home prices and the uncertainty of current employment and business success, signs to continue renting are increasingly leaning towards a yes.
Should I Continue Renting?
The fact is, many already prefer renting over buying, and the current real estate market (alongside other contributing factors) is causing more and more people to consider renting as opposed to purchasing. These contributing factors include high buyer demand, low housing supply, and inflation. Despite rising home prices, they are still being plucked from the market faster than ever, creating a short supply of buyers and putting high favors on sellers. In fact, in March of 2021, the median single-family home in the U.S. sold for a record $335,000 and typically spent just 18 days on the market – half as long as it would have lasted in March of 2019, when the median price was $261,500 according to the National Association of Realtors.
Without affordable houses available, more and more people are looking for apartments to rent. This is especially true considering everything the average American may face while trying to become a homeowner, including additional taxes, rising housing prices, shrinking U.S. GDP, the rising cost of living, and higher mortgage qualification regulations.
Renting vs. Buying a Home
If you’re still on the fence between buying a home and renting, we recommend paying attention to current numbers and trends and doing the math for yourself. While housing prices have risen substantially over the last few years, rent prices have moved in both directions depending on where you live. In fact, a recent report from Realtor.com analyzed home and rent prices in 50 of the nation’s most metropolitan areas, and only 15 of the 50 favored buying.
“The analysis, which compared the monthly cost of buying a median-priced home to the median price of renting a two- to four-bedroom unit in each of the top 50 markets in January 2021, found buying cost the same or was cheaper in 15 of the nation’s 50 largest metros, up from 13 a year ago,” reads the report. It is important to note that this is based on a 30-year fixed mortgage loan with 20 percent down. Putting less money down would result in a higher monthly payment, as it changes the “buy vs. rent equation” substantially.
In today’s market, on average, renting a home is much cheaper than buying. And for those who choose to rent for reasons other than financial obstacles—such as the potential for relocation or being mobile for work—renting continues to be the better option.
The Rental Property Market is Strong in Erie, PA
Rental property management companies such as Palermo Realty offer affordable and comfortable rental properties designed to meet the needs of all Erie residents, including single-family units and homes. Renting with Palermo offers benefits that home buying simply does not, including:
- No downpayment stress
- No worry about mortgage commitments or increasing rates
- No high-cost property maintenance
- Unemployment doesn’t mean you’ll lose your investment
- Freedom to travel or relocate if necessary
- Amenities on site, including fitness centers, swimming pools, lawn care, and snow removal
- On-site maintenance, ensuring you’re not buying into a money pit that needs constant repair
Ultimately, the decision to buy or rent is a personal choice from a financial and lifestyle perspective. For those that feel renting is in their best interest, Palermo Realty offers a number of rental properties and rent-to-own options, as well as assistance buying or building a home for those that choose to go in a different direction. Regardless of your decision, contact Palermo Realty today to start making moves on your next home.