Rent or Buy? How to Make the Right Move in Today’s Housing Market
Buying a home is the largest expense most of us will ever be responsible for, making it simultaneously exciting and scary. In today’s market, when home prices continue to rise and interest rates remain elevated, current renters with homebuying aspirations might be asking themselves, “Should I buy now or should I wait?”
The simple answer is that there are benefits to both renting or owning a home, and it depends on each person or family’s needs and goals. Renting offers flexibility and potential lower short-term costs. However, homeownership can build wealth over time, and in the long run, be more cost-effective than renting. Owning a home can also have positive tax implications, often reducing tax burdens as mortgage interest and property tax payments may be deductible from your federal taxes and many state taxes.
So, should you buy now or wait?
Arvest’s advice is this: If you’ve found a house that you want to make your home, do your homework and shop around until you find a lender with the right financial solution to get you into it.
At Arvest for example, there are many flexible financing solutions, including the Arvest Homebuyer Advantage program. In partnership with the Arvest Opportunity Fund, this program helps qualified first-time homebuyers secure financing with no down payment and no private mortgage insurance fee, empowering homeownership success through financial education requirements.
There’s been a lot of talk about the impact of average 30-year fixed mortgage rates remaining between 6-7% have on homebuying. The mortgage industry has a great quote, “Marry the house and date the rate.” This means that you should find the house that fits your needs that you can afford for the long term and accept the current market interest rate.
Mortgage rates are always changing, cycling through highs and lows. While you may not get the rate you were hoping for if you buy today, you may have the option of refinancing to a lower rate in the future. And even if they don’t drop back to the historic lows we saw in 2020 and 2021, a homebuyer could still reap the benefits of a rate that’s lower than when they first purchased.
Additionally, though adjustable-rate mortgages received a bad reputation in the 2008 market, they aren’t the same today. An adjustable-rate mortgage can be beneficial in higher-rate environments because they could drop as rates cycle. That’s another opportunity to cash in on a lower rate.
We’re hopeful to see long-term rates back in the 5%-6% range. And while 6% may feel like a sting compared to the 2%-3% rates from 2020 and 2021, remember that those were historically low rates and may not return to those levels anytime soon.
If you’re ready to get serious about being a homeowner, talk with a local mortgage lender to get pre-qualified. Getting pre-qualified is not a commitment to buy. It’s an educational step that helps you understand how much you can afford, your estimated monthly payments and what loan programs might be available to you.
Contact an Arvest mortgage lender to start your homebuying journey today.
Jason Peters, NMLS # 402102, is a senior vice president and mortgage loan manager for Arvest Bank - Greater Kansas City and can be reached at japeters@arvest.com.
With more than $27 billion in assets, Arvest is a full-service bank that delivers financial solutions to individuals and businesses of all sizes. Since entering the Kansas City market in 2009, Arvest has grown to a top 20 bank and the sixth largest mortgage lender in the metro. The bank has 20 locations in the metro area. Arvest is an Equal Housing Lender and Member FDIC.