Rents have increased significantly this year. The latest National Rent Report from Apartmentlist.com shows rents are rising at a rate much higher than the three years leading up to the pandemic:
“Since January of this year, the national median rent has increased by a staggering 16.4 percent. To put that in context, rent growth from January to September averaged just 3.4 percent in the pre-pandemic years from 2017-2019.”
Looking back, we can see rents rising isn’t new. The median rental price has increased consistently over the past 33 years (see graph below): If you’re thinking of renting for another year, consider that rents will likely be even higher next year. But that alone doesn’t paint the picture of the true cost of renting.
The Money Renters Stand To Lose This Year
A homeowner’s monthly mortgage payment pays for their shelter, but it also acts as an investment. That investment grows in the form of equity as a homeowner makes their mortgage payment each month to pay down what they owe on their home loan. Their equity gets an additional boost from home price appreciation, which is at near-record levels this year.
“. . . the average homeowner gained approximately $51,500 in equity during the past year.”
As a renter, you don’t get the same benefit. Your rent payment only covers the cost of shelter and any included amenities. None of your monthly rent payments come back to you as an investment. That means, by renting this year, you likely paid more in rent than you did in the previous year, and you also missed out on the potential wealth gain of $51,500 you could have had by owning your own home.
When deciding whether you should rent or buy in the future, keep in mind how much renting can cost you. Another year of renting is another year you’ll pay rising rents and miss out on building your wealth through home equity. Let’s connect today to talk more about the benefits of buying over renting.
Find Your Next Home
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Please call/text/message/email me to share your thoughts about your next home and I’ll identify your most important next step.
If you’re reading this late at night and want to start now, first send me an email, then focus on these items of the home buying process: 1) Download my Home Buyers Guide to learn general information (if you’re into doing your own research). 2) Talk to a quality mortgage lender and get pre-approved for financing. 3) Search for homes currently on the market to get a feel for the types of homes, locations, and price points available. 4) Read my Denver real estate blog (updated daily!) to further educate yourself about the market and relevant topics for home buyers. And of course, when in doubt, just call me and I will help you with each step of your journey.
When It Is Time To Sell Your Home
Find out how much your home is worth and download my free guide for home sellers for helpful information. It is important to choose a REALTOR® who can develop an effective marketing strategy for your property, negotiate well on your behalf, and has the knowledge to provide an accurate market comparison so you can determine the right asking price. The market changes each week and your asking price is an important component of your selling strategy. I am here to listen and serve. I will share how your home stacks up against the competition, or how we can position your property to sell quickly and for a good price, or talk through any unique circumstances or goals. Contact me today to start a discussion…
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