What's The True Cost Of Renting In 2022?
Are you a renter thinking about what you should do when your lease is up? Before you decide whether you should sign another lease or start shopping for a house, you should understand the TRUE costs of renting in 2022.
As a renter, you should be aware that rents have been steadily rising since 1988. If you were looking at a bar graph of rent prices since the ’80s, you’d see a continuous uphill climb until around 2010 when rent prices started increasing sharply and then a dramatic spike in 2021.
According to ApartmentList.com, since 2021:
“. . . the national median rent has increased by a staggering 17 percent. To put that in context, rent growth averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”
That’s a pretty huge increase compared to what we’ve seen in recent years and a good illustration of how quickly rents are rising. And the 2022 National Housing Forecast from realtor.com projects prices for available units will continue to increase this year by 7% in the next 12 months.
That means, if you’re planning to move into a different rental this year, you’ll likely pay far more than you have in years past.
So, what alternatives do you have as a renter facing rising rental costs? Homeownership. One of the many benefits of homeownership is it provides a stable monthly cost you can lock in for the duration of your loan.
If you’re planning to make a move this year, locking in your monthly housing costs for 15-30 years can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases.
Homeowners also enjoy the added benefit of home equity, which has grown substantially right now. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $56,000 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage, you grow your wealth through the forced savings that are your home equity.
Bottom line, if you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s connect so you can see how you can begin your journey to homeownership today. Also, be sure to ask us about our free First Time Homebuyers Guide, which will answer many of the questions you may have about the home buying process.