There was a time when it made more sense to dole out a rent check every month than commit to a mortgage. But things change, and your perspective should, too. Is buying a home better than renting right now in Seattle? Absolutely! Blue Fern Homes has a few good reasons you just shouldn’t ignore.
Money lost or money invested?
You pay rent for the privilege of staying in your home for one month. Where does that money go? It provides income and builds equity for the landlord. For you, it’s purely an expense.
The property owner has a mortgage, most likely a fixed rate where the only change from year to year is the taxes. Meanwhile, your rent increases annually, based on “cost of living”, which translates to “what I can charge you”.
On the other hand, when you buy a home, you reap those rewards, and more. Your property value usually increases, which boosts your home equity. You also gain the tax deductions that a renter doesn’t have.
While rents are climbing, homes are experiencing a similar rise in value. According to Trulia research, multi-family homes, like townhomes, are appreciating at a faster rate than single-family homes (which are still appreciating quite nicely). Seattle is one of the metropolitan markets seeing the most improvement in condo housing values.
Rates have dropped…again
Interest rates rose steadily in 2018, hitting 4.87% for a fixed-rate, 30-year loan last November. Economists predicted the number would hit 5% in early 2019 and 5.5% by August.
Surprise! It went the other way. The Feds not only decided not to raise rates but actually dropped them. Instead of the forecasted 5.5%, the current mortgage rate in August is 3.75%.
In most cases, you can own a home for less than the average monthly cost of renting.
Tax time made fun
Another advantage for homeowners comes at tax time. You have home tax deductions that renters don’t. In addition to closing costs for the year you purchase your home, you can deduct your mortgage interest and property tax every year. Sorry, renters, those deductions aren’t available to you.
Blue Fern Homes is expanding our hometown Seattle roots, building new homes in Seattle locations where people really want to live—living well and affordably! We focus on thoughtful, sustainable development with ongoing support for the community around us. Stay tuned for news of our upcoming plans to create exciting opportunities for homebuyers.