Renters typically have to decide whether to start a new lease, renew their current one, or buy a house each year. This year, nothing has altered. But before you go too far into your options, it's a good idea to have a basic awareness of the actual costs of renting moving forward.

Rent hikes were experienced by both current renters and new renters in the preceding year, according to statistics from realtor.com:

“Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2%) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”

Not shocking- That’s because, according to the Census, rents have been rising fairly consistently since 1988 (see graph below):

Therefore, if renting is something you will continue to do in 2023- it's important to know whether or not this tendency is likely to continue.

According to realtor.com's 2023 Housing Forecast, rents are predicted to continue rising.  This forecast indicates that rents would rise 6.3% in the upcoming year.  As a result, if you intend to rent again this year but haven't yet renewed your lease, you may end up paying extra.

You might think twice about your available options in light of these rising expenses.

An Alternative to Rising Rents is… you guessed it- homeownership!

One of the numerous advantages of owning a house is that you can lock in a consistent monthly payment for the term of your loan (stability). To quote Freddie Mac:

“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you’re paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”

Locking in your monthly housing payments for the life of your loan can be a huge benefit if you're intending to move this year. If you leave your housing payment up to your landlord and their renewal cycle, you won't have to worry about whether you need to change your budget to allow for yearly hikes.

The additional benefit of rising home equity is also enjoyed by homeowners. According to CoreLogic's most recent Homeowner Equity Insight study, the average homeowner actually increased their equity over the previous year by $34,300. Your rent payment as a tenant solely goes toward the cost of your home. When you pay off a mortgage on a property, the forced savings that is your home equity help you increase your wealth.

If you want to learn more about the benefits of homeownership read my blog Homeownership: The Long Term Benefit

In conclusion…

You’re either paying your own mortgage or someone else’s- make it yours! Don’t know where to start? Contact me and let's get you started on your very own roadmap to homeownership!