Why Buying a Home Makes More Sense Than Renting Today in Los Angeles and Beverly Hills, CA
Why Buying a Home Makes More Sense Than Renting Today in Los Angeles and Beverly Hills, CA | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
If you are considering buying a home or continuing to rent, there are a few factors to consider. Rental affordability has been a challenge for many years, and rents trend up over time, as data from the Census Bureau shows. In Los Angeles and Beverly Hills, CA, rental prices are some of the highest in the country, making homeownership an even more attractive option.
According to a recent rental report from Realtor.com, rents continue to increase, although at a slower pace than during the pandemic. In March 2023, the median asking rent in the United States was $1,732, up by $15 from the previous month and down by $32 from the peak but still $354 (25.7%) higher than the same time in 2019 (pre-pandemic).
With rents being much higher now than they were in more normal, pre-pandemic years, owning your home may be a better option, especially if the long-term trend of rents increasing each year continues. This is particularly true in Los Angeles and Beverly Hills, where rental prices are some of the highest in the country.
In contrast, homeowners with a fixed-rate mortgage can lock in a monthly mortgage payment for the duration of their loan (typically 15-30 years), providing stability and predictability to their housing costs. Additionally, owning a home may be more affordable if you need more space. The graph below compares the median rental payment to the median mortgage payment and shows that owning is typically more affordable than renting if you need two or more bedrooms.
Owning your home also allows you to start building your own equity, which in turn grows your net worth. As home values typically rise over time and you pay off your mortgage, you build equity, which can set you up for success later on because you can use it to help fuel a move to an even bigger space down the line.
If you are a first-time homebuyer or considering purchasing a home in Los Angeles or Beverly Hills, CA, connect with a real estate agent to explore your options. With rents rising and home prices expected to increase in these high-demand areas, pursuing your dream of homeownership may make more sense today than ever before.
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