Why Owning a Home is Still Less Expensive than Renting

House prices are up, mortgage rates are up. So do we all go rent? Not quite so fast. Let's say you have to decide between a $2,000 a month rent payment and a $2,500 a month mortgage payment. Many might think $2,000 is the better answer. Let's take a look at that. So the mortgage payments are also higher for the landlords that own the rental properties. Keep that in mind because what do we think is going to happen to their rental prices over time? They're going to keep going up at record paces like they have. Rent is up 6.7% in just the last year. That's a trend that doesn't seem to be slowing down because people have to live somewhere. If they can't afford to buy, they have to go re. So vacancies are at an all time low. You're paying top dollar for rent. So another 6.7% increase, let's say in the next year, that takes $2,000 a month to 2170amonth. And then let's do the 6.7% increase for year two. Well, now you're above 2270amonth. And let's flashback over to that $2,500 mortgage payment. If interest rates drop by one and a half percent, let's say, which that's a little bit light on the average recession mortgage rate drop, that'll save you about 250 bucks a month on a payment. So now that $2,500 a month payment is 2020 $22.50 after you refinance, while in year two of the rental it's 2270amonth. So you're actually paying more to rent in just the second year as opposed to if you bought the house now and refinance later. That's why owning is better. Plus your house is gaining a half to a whole percent of value every single month. Still on that pace. And hundreds of dollars a month of your mortgage payments going into your own equity, which is your own pocket.