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30
Is Renting Cheaper than Buying in Austin TX?
NOT SO FAST! According to data recently collected and published by Realtor.com the indicators are showing that Renting a home today in Austin and many other cities around the nation may actually be more affordable than purchasing! While this may look like a smart move for the short run it does not necessarily mean that things work out better for you in the long run. While there may be some short-term advantages the long-term effect of this can be the exact opposite!
The current "core inflation" rate reported by the US Bureau of Labor Statistics has risen by more than 100% in 2021 and renting a property means that a tenant has little insulation from these increases while the homeowner in a fixed mortgage situation has the advantage of a growing asset and fixed living expenses outside of property tax increases. Therefore one of the best moves anyone can make in times of higher inflation is in fact to get invested in homeownership as opposed to renting. Of course, each scenario is different. Down payment money, interest rates, and initial purchase prices play a big role in making an accurate calculation and different neighborhoods within a metropolitan area can be considerably more affordable in the outlying suburban setting than those closer in.
Considering that the average median sales price in our market is around $400,000.00 at the current "overall inflation" rate of 5.0% so far in 2021, in one year alone a homeowner would reap a value increase in a purchased home of $20,000.00. offsetting most of their monthly mortgage payments for the entire year. The same renter will have spent about $24,000.00 in rent with no tax advantages or asset growth.
The best advice we can give anyone is to take a close look at your personal situation before committing to a lease or purchase. Your findings may be considerably different than what the chart above would like you to believe. Check the details using our handy RENT-vs-OWN Calculator