Rent or Buy?

Nef Cortez

By Nef Cortez

Most people start their independent living when they first move out of their parent’s home by renting.  They either choose to rent a room at another person’s home, or possibly move into a friend’s apartment. Many times they go from that living arrangement to sharing the cost of renting an apartment or house together with a few friends or just someone else.

Although everyone has their own decisions to make, and many different circumstances, across our country, we tend to follow a consumer pattern throughout our lives.  Many financial analysts have studied the consumer cycle, and an established pattern has been the following for our society at large: one first starts working in their early late teens and into the early 20’s, and then family formation follows in the mid-twenties to mid-thirties.  Typically, at the stage of family formation and into the cycle of a young family  is when most of us address the issue of “Buying versus Renting”.  At this stage, there are usually young children in the household, and the provision for a home with a yard for the children to play in becomes a major concern.

Currently, the rental rates are very high, and have been increasing substantially at 5% plus per year over the last 6-7 years. This highlights the need to stabilize the monthly housing cost, and with current interest rates, it is a very good time to lock in a low rate by buying a home. Many economists are predicting interest rates will increase this year.  Just this week, the Federal Reserve approved its second rate hike of the year, increasing its benchmark interest rate by one-quarter percent.  This rate hike eventually gets spread out to consumer interest rates.

There are many other factors that come into making a decision on whether to Rent or Buy. Next week, I will provide in more detail those factors, as well as show a point by point comparison on the options.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at  Please feel free to email any questions regarding real estate.


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