We always hear about how owning a house is the American dream. While it is better to own a home than rent in the long run, here are a few key points that might make you reconsider buying a house, at least for a little while longer.
- Property taxes. Homeowners have them, renters do not. The amount varies on the value of your house and where you live, but it generally is in the range of $100-$600 per month.
- Home maintenance. Typically, a homeowner will have repairs throughout the year. It might not be every month, but there might be a $1,000+ expense every year or so. This equals about $150 per month.
- PMI. This is Private Mortgage Insurance. Homeowners pay this when their loan is more than 80% of the value of their house. This adds about another $100 per month.
Even with this information, my advice is still to own a home. The reason is simple, if you don’t own a home now and pay it off, you’ll be paying rent well into your 70′s. If you bought a home in your 30′s, you would have already paid it off.
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As home prices continue to drop it’s becoming more and more appealing to rent instead of buy.