Is it worth it to buy a home right now? Here are some insights for first-time homebuyers to help you make the right decision.
It’s the age-long question for Texas renters: is now a good time to buy a home or renew my lease and continue to rent?
We’ll give you some insights on the what the housing market looks like vs. the rental market in 2023 for first-time homebuyers. We’ll also review some of the advantages and disadvantages associated with renting, as well as some of the advantages and disadvantages associated with owning a home.
Texas Rental Market in 2023
Although Texas rent prices are relatively affordable compared to other major cities in the U.S., current rent trends show that Austin, Dallas, San Antonio, and Houston rent prices have increased over the past month in addition to showing a significant year-over-year increase.
According to a Federal Reserve Bank of Dallas forecast, year-over-year rent inflation is expected to increase from 5.8%, as of June 2022, to 8.4% in May 2023. Moody’s Analytics predicts that rental demand will ease in 2023, but will still see rent growth of about 3-4 percent.
Keep in mind that there is not a statewide law in Texas that places limits on how much a landlord can increase rent. And your landlord can increase the rent at any time.
Other disadvantages of staying in the rental market include no tax benefits, lack of stability, and you are at the mercy of your landlord.
However, there are some benefits to renting. First, relocating is easier, giving you more flexibility. Renting is typically a shorter-term commitment. Maintenance and repairs are not your responsibility. Lastly, payments tend to be lower than a comparable home loan payment.
Texas Housing Market in 2023
Texas home prices were up 3.3% in January 2023 compared to last year. However, the median days on the market was 55 days, up 103.7%, according to Redfin. There are many more homes on the market that are selling below list price, which means the housing market is becoming less competitive for buyers.
Here’s an interesting fact to consider: real estate is a big factor in net worth. The average net worth for homeowners is over $1.1 million, while the average net worth of non-homeowners is $95,600, according to Business Insider.
Also, according to data from the Federal Reserve, individuals in the housing market have a net worth 2.8 times the net worth of typical person who doesn’t own a home.
There are several benefits of being a first-time homebuyer. First, you have more control over your monthly housing payment. Owning a home can help you build credit. You may get a tax deduction, and, perhaps best of all, you can make the home your own.
There are also some disadvantages to consider with owning a home. There will be some upfront costs for down payment, closing fees, etc. Property taxes and HOA fees are a homebuyer’s responsibility. And owning a home is typically a long-term investment.
The bottom line comes down to this: would you prefer to stay in the rental market and build equity for your landlord, or would you rather take the leap into the housing market in 2023 and start building equity for yourself? Working with a local mortgage lender like Supreme Lending is the first step. Hello!
Texas’ Home Loan Specialists
Supreme Lending is your local mortgage lender, and we are ready to assist with all of your home loan needs and provide you with the best mortgage solution for your individual situation.
We help first-time homebuyers throughout the great state of Texas, and we’re proud to be one of the largest lenders in the state. We will help you along your journey to homeownership, explaining every step of the home loan process along the way. We genuinely enjoy helping new homebuyers navigate the Texas lending market.
To learn more about how you can get started with Supreme Lending, or to shop for mortgage solutions for individuals and families in Texas, contact us today.