If you’re contemplating whether to continue renting or take the leap into homeownership in Palm Beach County this year, there are several factors to consider. Rental affordability has been a challenge for quite some time, and the trend of increasing rents persists. Census data reveals that rents have steadily climbed since 1988, and the latest rental report from Realtor.com indicates that rents are still growing, albeit at a slower pace compared to the height of the pandemic.

In March 2023, the U.S. rental market experienced single-digit growth for the eighth consecutive month. The median asking rent was $1,732, showing a $15 increase from the previous month. Although it is $32 lower than the peak, it remains $354 (25.7%) higher than the same period in 2019, before the pandemic. With rents significantly higher now compared to pre-pandemic years, homeownership may be a more favorable option, particularly if the long-term trend of annual rent increases continues. On the other hand, homeowners with fixed-rate mortgages can secure a stable monthly payment throughout the duration of their loan, typically spanning 15-30 years.

Owning a Home Can Offer More Affordability for Additional Space

The graph below, which compares national data on the median rental payment from Realtor.com and the median mortgage payment from the National Association of Realtors (NAR), illustrates that owning is typically more affordable than renting when you require two or more bedrooms:

If you’re seeking a residence with two or more bedrooms to accommodate your household, provide ample space for your belongings, or dedicate an area to pursue your hobbies, homeownership may make practical sense.

Homeownership Allows You to Build Equity

Beyond shielding you from rising rents and offering affordability for more space, owning a home enables you to build equity, thereby increasing your net worth. As home values tend to appreciate over time and you make mortgage payments, your equity grows. This equity can lay the foundation for future success, as you can leverage it to move into an even larger property down the line. According to Zonda, the primary reason millennial homeowners purchased their homes in the past year was to build their equity rather than someone else’s.

Bottom Line

If you’re on the fence about buying a home or continuing to rent, it’s worth exploring your options with a real estate professional. Given the ongoing rise in rents, pursuing homeownership may be a more sensible choice to fulfill your homeownership dreams while ensuring greater financial stability. Let’s connect to discuss your circumstances and find the best path forward in Palm Beach County.