In today’s economy, it’s pretty expensive to buy a home. Since the COVID-19 pandemic, the average cost of a home nationwide is up and mortgage rates remain high despite cooling inflation.
It might be tempting to put more money toward investing and delay saving for a home. But in a recent YouTube video, financial expert Dave Ramsey said that’s not the right move.
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“The largest line item … in your budget every month … is the cost of housing. When the largest line item is rent and it goes up every single year, your largest item is out of your control,” Ramsey explained.
However, you’ll want to carefully consider the pros and cons of buying versus renting when evaluating your finances.
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Here are the pros and cons of buying a home versus renting, according to Ramsey, with some points sourced from Empeople Credit Union.
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Large upfront cost
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Much more difficult to change homes
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Responsibility for maintenance costs, homeowners insurance or property taxes, even after the home is fully paid off
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No responsibility for maintenance costs, homeowners insurance or property taxes
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Lower upfront costs compared to buying
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Ability to live in different places more easily
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Rent will consistently go up
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Can’t build equity in a home
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May need to move if the landlord decides to sell the property
Ultimately, if you’re choosing between living in an apartment and investing more or buying a house and investing less until the house is paid off, consider the latter.
Even if you have to forgo investing more money than you’d like for a while, the payoff of being able to finally make a down payment and move into your own home can be well worth it (and could pay off big time later on).
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This article originally appeared on GOBankingRates.com: Dave Ramsey: Should You Invest or Buy a House?