What a year 2017 has been. Only half way through the year and so much has happened.

Donald Trump entered the White House as the 45th president in the United States.

Super Bowl LI, the New England Patriots made a wild comeback and defeated the Atlanta Falcons 34-28 in overtime.

The Beauty and the Beast, an old romantic classic fairy tale between the beautiful young woman and the hideous prince, came to life with the help of Emma Watson.

But still, the daunting question remains throughout the years, is it better to buy or rent?

There are many factors to consider if buying or renting is the best option for you.

Ultimately, this decision is based off you and only you.

Don’t know where to start? We’ve broken it down so you can start asking yourself the right questions.

A Millennial Perspective


Take a look inside the life of a modern millennial.

Aged between 18 to 34, either starting their collegiate career, maintaining their professional career, or still trying to figure out what they want to do with their lives.

It’s definitely a stressful time. Millennials are expected to be financially stable early on like their parents, by it’s nearly impossible with how society works today.

The student debt millennials face is at historic highs. They are drowning with overwhelming costs and expenses four-year schooling requires. Collectively, the most recent report shows $1.44 trillion in U.S. student loan debt. To break it down, the median monthly student loan payment for borrowers aged 20 to 30 years old is roughly $203.

That’s one expensive piece of paper.

With student loans being a heavy financial burden for millennials, it makes it difficult now more than ever to be well off.

According to a study done by the Apartment List, it found 80 percent of millennial renters want to purchase a home, but cannot because of one huge common factor: the ability to afford it.

The survey was made up of about 24,000 renters and collected data from October 2016 to April 2017. The primary conclusion drawn from this was millennials are pushing back the date to own a home simply because of finances.

Survey Says…

Although the percentage of wanting to buy a home is high, the ability to do so in the near future is low. About 67 percent of respondents are planning to buy a home in three years or more. Compared to 53 percent in 2014.

16 percents of respondents are planning to buy a home within the next two years. Compared to 25 percent in 2014.

At this rate, people will continue to wait several of years before purchasing a home.

Based on the respondents’ current rate of monthly savings, the survey concluded millennials in large metro areas will need at least a decade to save enough money for a 20 percent down payment on a condo.

However, if they were to put a down payment of 10 percent, only one of three millennials would be able to save and afford that amount in five years or less.

Results highlight major issues in the housing market and point out a long-term crisis mainly for millennials. Their inability to financially support themselves with a mortgage is delaying their homeownership status.

Not only are millennials facing financial debt, the availability of entry-level homes is scarce. While the demand of these homes increased, the quantity decreased.

Millennials are forced to make tough decisions on their living situation. They need to look at every angle before buying a home. They could either: extend their budgets and purchase at higher debt-to-income ratios, heighten the risk of mortgage default, move to more affordable areas or delay buying a home.

Millennials are suffering from student debt and inconsistent career opportunities. With these burdens, it’s difficult for them to afford and manage a mortgage.

Studies show with millennials lack of savings and shortage of entry-level homes available, they may be forced to rent for years to come.

Statistically Speaking


Over the past three years, the wait time for millennials to purchase a home has continued to increase.

In 2014, 23 percent of respondents plan to wait five or more years before purchasing a home. Compared to 2016, 36 percent of respondents plan to wait five or more years. This number has jumped more than half.

Of the respondents that plan on buying a home in the future, 72 percents said affordability was the number one obstacle. Following with 45 percent of respondents said they are not ready to settle down. And finally, 36 percent of respondents said they are waiting to get married.

Owning a home is a huge responsibility, from maintenance, to finance and everything in between. Millennials’ primary obstacle is the ability to afford it. But which financial part raises the most concern?

According to the survey, 53 percent are concerned about the down payment. It is a general rule of thumb to put down 20 percent to obtain a better mortgage. The more you put down, the less your monthly payments will be.

If you want to take a look at the different mortgage options available, check out this page, here.

36 percent are concerned about monthly payments. Again, this goes hand in hand with your down payment. The less you put down, the larger the monthly payments will be.

29 percent are concerned about a low credit score. The lower the credit, the smaller the loan.

The last 13 percent are concerned about other financial obligations a home requires.

Now that millennials are on the radar of saving for a mortgage, how many of them actually do so? With current living expenses, student debt and low incomes, it is hard to set aside money for the future.

The survey concluded that 68 percent said they have saved less that $1,000 for a down payment, while 44 percent said they have not saved anything.

40 percent of respondents said they aren’t saving for a down payment on a monthly basis. A low percentage of 15 percent saved $5,000 or more. And 29 percent are saving $200 or more each month.

On the other hand, older millennials, aged 25 to 34 years old, were twice as likely to have saved $10,000 for a down payment. While 42 percent of them haven’t started saving towards a down payment.

With the given results, it’s clear that millennials are in no hurry and are nowhere near financially ready to buy a home.

Maybe with an increased wage growth, they might have the potential to start saving earlier for a down payment.

With this pattern, it’s predicted that millennials will migrate to more financially-friendly areas so they can afford to settle down.

Looking in a Different Light


Clearly, millennials are not in the market to buy, so let’s look at this in a different perspective.

Are you currently weighing out the pros and cons of renting and buying?

Before jumping to any conclusions, check out this list of renting pros and cons and buying pros and cons.



  • Build home equity and wealth
  • Sizable tax deductions possible
  • Your space, your rules (pets welcomed!)
  • Ability to remodel, expand or tear down
  • Pride of ownership (social status, accomplishment)
  • Potentially better for children/family structure
  • Mortgage can improve your credit history/score
  • Ability to borrow against your home (HELOC or cash-out)
  • No more monthly payments once mortgage is paid off
  • Fixed payments (if applied for fixed mortgage)
  • Mortgages are the cheapest loans available
  • No landlord
  • Can exclude capital gains when you sell (partially)
  • Inflation hedge
  • Forced savings
  • Leveraged investment
  • Can rent out to others
  • Retirement nest egg
  • Can see and use proceeds for other investments


  • Home prices can lose value
  • Could overpay for your property
  • Obtaining a mortgage and finding a home is a hassle
  • Not everyone qualifies for a mortgage
  • You must pay taxes and homeowners insurance
  • Total housing payment can be more expensive
  • Mortgage payment can rise (if using ARM)
  • Sizable down payment necessary
  • Maintenance costs can be expensive
  • Pricey HOA dues (if applicable)
  • Long-term commitment
  • Increased liability and responsibility
  • Transactional costs of buying and selling
  • Ownership is stressful
  • Taxes and insurance generally rise
  • Home can be damaged or destroyed if not fully insured
  • Can be foreclosed on and lose your home



  • May be cheaper than a mortgage payment
  • Fewer (if any) maintenance costs
  • No down payment required (less deposit)
  • No real estate taxes (renters insurance optional)
  • Less stress (landlord’s property, their responsibility, not yours)
  • Freedom to move or downsize when necessary
  • No risk of home price depreciation
  • Some utility bills may be included
  • “Free” amenities such as pool, gym, security
  • Money can be used for other, more profitable investments
  • Can’t be foreclosed on


  • Rental down payment may exceed monthly cost
  • No ownership or wealth creation
  • Payments never stop when renting
  • Rent will rise over time (unless grandfathered in)
  • Must deal with a landlord or management company (may be hard to get a hold of)
  • No tax benefits
  • Rules, regulations and limitations (must follow or could get evicted)
  • More temporary, less stability
  • Always at the mercy of the property owner

Questions to Ask Yourself


As you can see, there are many factors to consider when deciding where you want to call home.

Not only do you have to compare and contrast home buying and renting, you need to ask yourself question to really ensure your readiness.

Below are some starter questions that can help you determine if you’re ready or not:

What is my top financial priority?

Buying a home can slow down or delay any financial goals you had planned. You will need to think goals through before purchasing a home.

Do you have to lower other expenses or cut down spending  in order to afford monthly payments and rebuild your income? Before signing any papers, make sure you don’t have to drastically change your spending habits, you want to be completely comfortable with your monthly payments.

If you do decide to cut back on certain expenses, you will save and earn more money. Meaning, you will have extra cash to pay off your mortgage, unless you don’t have to worry about credit card debt or student loans.

Thinking about starting a retirement or emergency fund? These plans may have to sit on the back burner for a bit until you are financially ready to start saving again.

Do I have savings for a down payment and closing costs?

Unlike home buying, renting requires a down payment worth to cover first month’s rent and some when signing a lease.

Buying a home on the other hand, requires a minimum down payment of 6% or more of the home’s value. In addition to closing costs, which adds another 2-3% to the total costs.

Traditionally and most advised, it’s best to put a down payment of 20% to secure a decent amount of equity and avoid private mortgage insurance.

If you don’t have the most desired savings, aim towards building up for a down payment.

Even if you do reach that goal, really think it though if you want to spend that money on a house or other goals in life.

How do home and rent prices compare?

This ultimately depends on what area you live in.

If you’re dealing with high rent dues, paying mortgage payments sound like a financially better option.

However, if your home is an expensive area, you may not be able to afford the home itself. It could potentially strip yourself out of savings and leave with nothing left over for other daily or maintenance needs.

How long do I plan to live there?

Not only do you need to plan your financial future, but your living situation as well.

If you plan to buy a home, the longer you live there, the better of an investment it will be.

Ask yourself:

Do you like your city?

Do you like your job?

Do you see yourself living in that area for several years?

If you answered yes, it may be worth investing into a mortgage.

However, you should break your finances year by year to see if living in a home for a certain amount of years will break even with your initial costs.

Will I qualify for a good deal on a mortgage?

Your mortgage lender will look at your income and credit history to determine what kind of mortgage loan you qualify for.

Typically, people aim for the lowest rates, meaning, they will have lower monthly payments.

This is usually spread out on a timeline of 15-30 years. The amount you put down also comes into effect when determining your mortgage loan.

What other costs will I be responsible for as a homeowner?

When comparing renting versus buying, be sure to factor in home owning costs beyond mortgage principle and interest.

Home buyers need to consider escrow costs, homeowner’s insurance and property taxes.

And you can’t forget the maintenance fees as well, including random repairs or broken appliances.

Homeowners can expect maintenance costs to be 1-3% of your home’s sale price. Renters however, do not have to worry about those expenses.

Am I comfortable with the risks of owning a home?

Like any investment, it can have the potential to encounter risks.

There is no absolute guarantee that you will get a good return on your investment. This is why you need to be 200% sure if you are buying a home, you are comfortable with all the benefits and risks it comes with.

You need to prepare for any unexpected life changes, such as unemployment or financial hardships.

If you’re still curious on what being a homeowner means, check out this blog, here.

How would renting versus owning affect my lifestyle?

What it comes down to is balancing out the pros and cons of renting versus buying.

Review your personal lifestyle, values and goals, and correlate them to the idea of buying a home or renting.

For example:

Buying – you have the freedom, luxury and control of what you want to do with your home.

Renting – you have the convenience of short-term commitment, flexibility and don’t have to worry about maintenance issues.

Ultimately, this decision is solely based on your current finances, career and overall lifestyle situation.

Breaking it Down

According to ATTOM Data Solution reports, buying is more affordable than renting in 66 percent of American housing markets.

To put it in perspective, the study found that a three-bedroom apartment is less affordable than monthly payments on a median-priced home in 354 out of 540 countries.

On average, a three-bedroom apartment would average to take out about 38.6 percent of wages. Opposed to a monthly mortgage payment on a median-sized home would require only 36.6 percent of average wages.

This report also discovered the decision to rent or buy a home also depends on where you live.

Buying over renting is favored in big cities, which include: Chicago, Phoenix, Miami San Bernardino, Las Vegas, Dallas and Philadelphia.

Major metro areas are quite costly to maintain and rent, such as: San Francisco, Washington D.C., Key West, New York City and San Diego.

Rent dues are increasing faster than average wages in 62 percent of the countries studied. Meaning, people are struggling to financially support themselves in a rented apartment while working 40 or more hours a week.

Daren Blomquist, senior vice president for ATTOM Data Solutions, says the report clearly illustrates what many would-be buyers are going through.

With today’s low rate of homeownership and low inventory of rental property, has caused rental rates to increase during the housing recovery period.

66 percent of the markets studied proves it makes more sense to buy a home over renting. This is applicable to almost everyone that plans to live in that area and has a steady job and income.

Home buying is also appealing because home loans are cheap, which is a big reason why it costs less to buy a home than to rent. Experts have estimated buying is less costly than renting, even with factoring in property taxes, insurance, income tax deduction benefits and concluded these payments very similar to rent obligations.

In addition, fixed rates on mortgages are at an all-time low. Another incentive for people to take an advantage and invest in a mortgage. This gives people the ability to qualify for a better loan and afford a bigger property, of course if they can maintain it financially.

If renting is comparable to buying payments, it’s best to buy so you can invest, make a profit and have a place of your own.

Not only does homebuying give you the pleasure of saving money, it gives you other perks.

Homeownership offers people lower monthly payments, and gives the owner the ability to deduct their mortgage interest from their taxable income.

People also have the opportunity to build wealth, while earning equity, which is not possible through renting.

Homebuyers also enjoy the privacy, space and flexibility a rented apartment couldn’t offer.

Lastly, owning a home and paying a mortgage builds your credit history and can improve your credit score, of course if you keep up with monthly payments.

Buying a home

Will save you money

Get My Pre-Approval

mortgage loan process

Pin It on Pinterest