In today’s economy, buying a home is quite expensive. Average home prices across the country have risen since the COVID-19 pandemic, and mortgage rates have remained high even as inflation has slowed.
You may be tempted to put more money into investments and delay saving for a home. But financial expert Dave Ramsey said in a recent YouTube video that’s not the right thing to do.
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“The biggest line item in your monthly budget is your housing costs. If your biggest line item is your rent and it goes up every year, your biggest line item gets out of control,” Ramsey explained.
However, you should carefully consider the pros and cons of buying versus renting when evaluating your finances.
Current trends:
According to Ramsey, here are the pros and cons of buying versus renting a home. Some points are taken from Empeople Credit Union.
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Large initial cost
It’s much more difficult to change homes
Responsible for maintenance costs, homeowners insurance, and property taxes even after paying off the home in full
No liability for maintenance costs, homeowners insurance, or property taxes
Initial cost is lower than purchasing
Makes it easier to live in different places
Rent keeps going up
You cannot build equity within the family.
If your landlord decides to sell the property, you may need to move.
Ultimately, if you have a choice between living in an apartment and investing more, or investing less until you buy a house and pay it off, consider the latter.
Even if you have to hold off on investing more money than you’d like for a while, the reward of finally being able to make a down payment and move into your own home is well worth it (and There is also the potential for huge profits). .
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This article originally appeared on GOBankingRates.com: Dave Ramsey: Should you invest or buy a home?
