But if you’re pondering a change of address in retirement, it’s worth considering all the angles of buying vs. renting, even if you haven’t been a renter since shag carpets were in style.
Home Prices Are Soaring
If you need to make this housing decision soon, you’ll want to take into account the recent run-up in home prices in many parts of the country since that could affect whether you can afford to buy.
When you’re figuring out whether to buy or rent a place in retirement, a lot depends on your personal financial situation, of course. You’ll be factoring in such things as how much you’d get for selling your current home, your total savings and when and where you’ll retire.
A Strong Argument for Buying
That said, if you’re raring to relocate now, today’s near-record low mortgage rates make this an unusually opportune time to buy.
A study by the real estate website Trulia recently concluded that buying a home would be cheaper than renting in all of the top 100 U.S. metropolitan markets if you take out a fixed, 30-year, 3.5 percent mortgage and stay in the home for at least seven years. (The average mortgage rate has risen slightly since the study came out, to 3.75 percent.)
Trulia has a rent vs. buy calculator that will let you plug in your own numbers to see which way the balance would tip in your case.
If your retirement is years away, however, the picture could change. Higher mortgage rates, fast-rising housing prices or a combination of the two might make renting look like a bargain.
Next: Home But Not Alone
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