Should you rent or buy?

In the Seattle area, homes are not cheap, but rents are also high and continue to rise. How do you make an informed decision about what is the best option for your short and long-term goals?

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What are the factors to consider?

1. Home/rent prices

2. How long do you plan to stay?

3. What are the mortgage details?

4. What do we think will happen in the future?

But what about down payments?

You do NOT need to put down 20% to buy a home. According to the National Association of Realtors, first-time buyers average just a 6% downpayment when buying their home.

 

1. Home/Rent Prices

The average sale price for a home in Seattle has been hovering in the $700,000 to $750,000 range.

Rents in Seattle average in the $2,500 neighborhood, depending on the type, age, and condition of the home. 

2. How long do you plan to stay in Seattle?

We know that a lot of people are relocating to Seattle because of the great jobs here. We work with clients like this all of the time. Some of those people stay and make Seattle their forever home, and some move back after just a few years. The longer you stay, the more attractive buying becomes.

3. What are the mortgage details?

The down payment, mortgage rate, and the length/type of mortgage all matter here. Most buyers use a fixed-rate 30-year mortgage, because that is often the best balance of cost, flexibility and risk. As far as the down payment is concerned, that depends on how much money you have saved or can borrow from a family member. The mortgage rate has a large impact here, and right now rates are at actual historical lows, below 3%, which gives buyers more purchasing power.

4. What do we think will happen in the future?

There are a lot of factors and inputs that can have an impact on the long-term outcome of your decision to rent or to buy. Many of these things are hard to predict - inflation rate, home price growth rate - but if we can show you just one graph to persuade you (caveat that past performance does not indicate or guarantee future outcomes)...

This is a graph showing the median sales price for single-family homes and condos in King County Washington from 2010 to 2020.
If you bought a home in 2010 for approximately $350,000, it has appreciated at approximately 6% per year, and is now worth in the neighborhood of $625,000.

Why we recommend home buying

1. Control. You can do what you want (paint colors, landscaping, appliances, etc), and know that you're not spending your time and money making changes that you'll have to un-do before you move. Oh, and you won't be moving!

2. Mortgage Payment Stays The Same, Rents Will Rise. If you get a fixed-rate mortgage, your mortgage payment cannot change. Meanwhile, your rent will likely increase, and this stability in your mortgage payment gives you more control of your household budget.

3. Tax Benefits. The tax code is preferential to homeowners. You may be able to deduct a portion of your mortgage interest, and other benefits.

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I'm A First Time Buyer

Is your rent check getting too big? Are you thinking about purchasing a home in the Seattle area, but are overwhelmed and don't know where to begin? We've got you covered. Serving the Seattle area since 2005, we have helped hundreds of Seattle home buyers go from overwhelmed to overjoyed. Watch the video story here.

I'm A First Time Buyer - Seattle Real Estate
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