There are pros and cons to owning a home versus renting one. However, most experts will agree that owning a median-priced home is more affordable than the average rent on a two to three-bedroom property. This means major homeownership expenses consume a smaller portion of average wages than renting.

Owning a home is a major part of the American dream. Choosing to buy or rent, though, is a major decision that affects your finances, lifestyle, and your goals. Whichever option you choose depends on your lifestyle and financial situation. Both owning and renting require regular income to meet expenses, and also require a certain degree of effort to maintain.

Renting

Renting a property doesn’t come with all the responsibilities associated with owning a home. And, you have more flexibility. You aren’t necessarily tied down to your property. Owning your home gives you an investment, but it does come at a major cost upfront and over the long run. Renting also offers predictable monthly expenses, and someone to take financial responsibility for major repairs.

A downside to renting though is that you may face a rent increase each time your lease is renewed. This has especially been the case in Lee, Collier, and Charlotte Counties of Southwest Florida where home prices have boomed over the past year. Landlords are increasing rent as they see their investment properties increase in value. Fort Myers and Naples, Florida have seen dramatic rent increases over the past year.

Owning

When you own your home, you can make decisions about the look and design of the space. You also get a sense of stability and pride of ownership. Owning a home comes with added expenses besides a mortgage. There are property taxes, insurance, lawn maintenance, pest control, and repair fees to consider. Owning a home does give you tax benefits. Home mortgage interest deductions reduce some expenses during the early life of a loan if deductions are itemized.

If you live in a community with an HOA, it may take some homeownership chores off your plate. However, it will usually cost a few hundred dollars a month. Homeownership brings benefits such as a sense of stability and pride of ownership. Also, there is a benefit to having tax deductions and equity. However, when repairs are necessary the homeowner must foot the bill.

Across most of the US, homeownership remains more affordable even though home prices have increased more than average rents and more than averages wages. The analysis comes from fair-market rent data for 2022 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics, and public-record sales-deed data from ATTOM in U.S. counties with single-family home sales data.

Home prices are rising faster than both rents and wages. Furthermore, wages are rising faster than rents. The housing market boom of the past decade keeps pushing home values to new records. Yet homeownership continues to be the more affordable option for average workers in much of the country because it takes up a smaller portion of income.