Renting and housing prices are rising steeply around the country. In Wisconsin in particular, rent has risen up to 10% over the last two years in certain communities, and housing prices reflect a similar growth in the last year alone. It’s a stressful time for everyone, especially those who may have felt ready to buy a home but are now pumping the brakes and asking themselves, Is it better to rent or buy right now? 

When the lockdown for COVID-19 began two years ago, many people began to rethink their housing situation. However, because there was a general discomfort among sellers’ to let a large number of people walk through their doors during the uncertain initial stages of COVID’s outbreak, there weren’t as many options available on the market. This, of course, led to a competitive market, but it was forecasted to cool down rather quickly.

Unfortunately, instead of softening, the market has only become worse for buyers. 2021 had the highest sales prices and sales volume on record. For every seller there seem to be multiple more buyers who come onto the market every day. To make matters worse, mortgage rates have increased and spurred an additional sense of urgency among buyers. Because experts can’t confidently predict when the peak of this market will occur, that leaves buyers with more questions than ever. 

On one hand, buying a home today could mean purchasing a house at its most expensive price. On the other, this upward trend could continue for quite some time, leaving buyers with remorse over not having pulled the trigger earlier. According to Fannie Mae and Freddie Mac, it is predicted that rates will continue to increase for the remainder of 2022 and well into 2023. 

This, however, doesn’t automatically mean that renting in today’s economy is a more prudent financial decision. Inflation has caused rent prices to skyrocket as well. Historically, inflation takes several years to regulate, and it is not predicted that these renting prices will drop any time soon. 

With all of this information in mind, making a decision may seem impossible. On top of that, there seems to be a lot of conflicting advice out there telling you which way to turn. We’ve compiled a list of pros and cons to help you make the important decision about whether or not you are ready to buy a home. 

Pros for Buying a Home

1. 
   You Can Build Equity When You Own Your Home Equity is the difference between what you owe on your mortgage and what your home is currently worth. For example, if you owe $150,000 on your mortgage your home is currently worth $200,000, you have $50,000 of equity. Equity is a great financial tool that you can use when you want to buy a more expensive home in the future or to make home improvements. Your equity builds as you pay your monthly mortgage on time.
2. 
   Buying a Home Can Give You More Stability When you buy a home, you can lock in your mortgage rate over the loan’s lifetime. This means that you’ll be paying the same amount each month, whereas rent can increase at the end of your lease and under other circumstances.
3. More Control Over Your Living Space With working from home becoming more of a norm (one that is likely here to stay in many cases), many people want a home office or space to be able to work within their own home. When you rent, you aren’t able to make the kinds of changes to your living space that you would if you owned your home. 
4. There Are Tax Advantages To Buying Your Home Property taxes and mortgage interest are tax-deductible in Wisconsin. 
5. You Can Improve Your Credit By Owning a Home If you make your monthly mortgage payments on time, your credit score may improve.

Pros For Renting

1. 
   Renters Don’t Pay For Maintenance Your landlord is usually responsible for maintaining the property, like the heating, water and air conditioning units. You will, however, still usually have to pay for the monthly use of these. You also will likely not have to maintain your yard or shovel the sidewalks around your rental property.
2. Renters Don’t Pay Property Taxes When you rent, you don’t have to pay the property taxes that go along with owning property. You also won’t have to pay any HOA fees. 
3. You Can Move More Frequently If you like variety in your home-life, you may not want to stay in one place too long. Renting allows you the freedom of moving without penalty when your lease is up.

2022 has so far reflected the record-setting trends of 2021, and it’s likely going to continue into 2023. It’s a stressful time for many people as they decide where and how they want to live. As a potential property owner, you’re likely hearing all kinds of advice, but there are pros and cons for each choice you make. Don’t let the stress of our current economic climate keep you from experiencing the excitement of choosing to buy a new home. It’s ultimately up to you!