Last week, I highlighted some benefits of homeownership, particularly given NYC's exorbitantly high rents. Reportedly, only 5 percent of apartment rentals are affordable on the average local worker’s salary. Some of you expressed interest in buying a home but had concerns about upfront costs, maintenance fees, taxes, and other expenses.
To address these considerations, there are several financial tools available to help weigh the costs of buying versus renting. Fortunately, the New York Times recently published a financial calculator that accounts for current tax laws as of May 2024. This interactive tool compares the most significant costs associated with buying or renting, helping you determine which option makes more financial sense in the long run, rather than just what you can afford today.
Various external factors can influence costs, so it’s key to keep a long-term perspective in mind. With that said, the tool allows you to adjust variables like the inflation rate, maintenance fees, and homeowners’ insurance, enabling you to test different scenarios and see the cost variations between buying and renting. Also, it’s worth mentioning that while the tool focuses on financial aspects, there are non-financial reasons to consider in your decision-making process.
Regarding affordability, I understand from speaking with some clients that high interest rates and home prices can make desirable neighborhoods or certain property sizes seem out of reach. However, you might be surprised at what’s available within your budget. Additionally, consider your timeline for making this important life decision. Investing in a home isn’t just about money; it’s about your life goals too.
It's also worth noting that during an election year, the market tends to slow down as many buyers and sellers adopt a wait-and-see approach. This leads to reduced inventory levels and fewer transactions, which is an important factor to consider in your decision. I encourage you to look over the Buyers section on my website for helpful information. If you would like to further explore the option of buying, please reach out. I am happy to jump on a call or meet in person.
Have a safe and happy Memorial Day weekend.