Is Buying a Home Cheaper than Renting in California?

Homebuyers in front of their new home.

Buying a new home may seem financially out of reach for many, but your dreams of homeownership could be closer to reality than you think. When looking for a place to live, most people turn to renting as their first option, assuming it is most cost-effective. However, owning a home of your own may be more attainable than it seems. In some places, homeownership might even be more cost-effective than renting. This year in California, the average monthly home payment was lower than the average rent. Not to mention the ability homeownership gives you to make upgrades and cost-saving efficiencies.

House with trees in front of it.

Financially Sound Decisions

While purchasing a home comes with new responsibilities, it’s arguably one of the most intelligent financial decisions a person can make. It’s becoming more practical to own than rent in many places. As mentioned above, California is a prime example of this with average mortgage payments being typically lower than rent. This is creating a new and exciting opportunity in the California home market.

Aside from the potential cost difference, owning a place of your own gives you the freedom to make improvements on your terms. This freedom allows you to implement money-saving and energy-efficient updates. Through the combination of potential increases in the market value and upgrades in the home, your home’s value can grow significantly from the purchase price.

The Mortgage-Free Movement

Renting an apartment or house from another person doesn’t provide any long-term value to the renter. At the same time, homeownership creates the opportunity to build equity. Home equity accumulates over time and can ensure your financial stability in the long run. It is the difference between what you owe on your home and what it is currently worth. Meaning you will increase your net worth as your property value increases. This tends to be a primary motivating factor when deciding to buy a home, resulting in more than just a place to live, but a long-term financial asset.

It also creates the potential to one day live mortgage-free. Recently there has been a buzz around mortgage-free living and the FIRE Movement, which stands for “Financial Independence Retire Early.” The FIRE Movement is based on the idea of saving and investing aggressively to speed up the time it takes you to retire. This, of course, includes a paid-off mortgage.

Whether you want to upgrade to a larger home in a few years or downsize after retirement, a higher selling price will help you achieve your goals. With a potentially increasing market, your home can be a great investment for the future.

Explore Your Homebuying Journey Today!

In past years, it has been expressed that renting is the best option; however, owning a home of your own may just be more attainable than ever before due to the current rental housing market. Homeowning comes with many positive benefits, including a long term investment with a potential upside.

Homes Built For America makes purchasing your new home easier and more possible than ever before.

If you’re ready to take that next step into home homeownership, reach out to our team today.

 

Start Your Homebuying Journey Today!