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Are you worried about where you’ll live when your lease ends if you’re a renter? Understanding the actual cost of renting in 2022 is essential before moving into a new house or apartment.
If you’re a renter, you should know rents have been going up since 1988 (see graph below):
Rents increased dramatically in 2021. ApartmentList.com reports the following increases since January 2021:
“. . . the national median rent has increased by a staggering 17.8 percent. To put that in context, rent growth from January to November averaged just 2.6 percent in the pre-pandemic years from 2017-2019.”
In 2021, rents increased at a rate that was ultimately out of line with recent increases. So rents are going up fast. According to realtor.com’s 2022 National Housing Forecast, vacant unit prices will rise in 2022:
“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth . . .”
In other words, if you intend to move into another rental this year, you’ll likely pay substantially more than you have in the past.
Rents are on the rise, so homeownership can be an affordable alternative
Rising rental costs may leave you wondering what your options are as a renter. One option is to become a homeowner. Among the many advantages of homeownership is the stability of your monthly payment over the course of your loan.
National Association of Realtors (NAR) Chief Economist Lawrence Yun says:
“. . . fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Locking in your monthly housing costs for 15-30 years can be a significant advantage if you’re considering moving within the following year. Thus, you won’t have to worry about adjusting your budget to account for increases each year.
Homeowners also enjoy their home equity, which has grown a lot lately. According to CoreLogic’s latest Homeowner Equity Insight report, the average homeowner in the US gained $56,700 in equity over the past year. If you’re a renter, your rent payment only covers your housing costs. With a mortgage payment, you grow your wealth through the forced savings of your home equity.
It is crucial to consider the true costs involved when considering renting this year—interested in becoming a homeowner? Let’s connect so you can find out how to get started.