Over the last year, rents have risen 2.4% nationwide. In San Diego, rents have risen 8% in the last year alone. The median rent in San Diego is $2,500 which is nearly double the national median rent of $1,435. The question is, what can we expect to see for rents in 2018 and how does it compare to owning a home?
For starters, Zillow predicts that rents will increase an additional 2.9% in 2018. These increases in rents are definitely a good reason to switch to owning a home and will cause more demand on the housing market as more people switch from renting to owning.
It's important to keep in mind that as rents have risen 8% in San Diego in 2017, home values have also risen 8% over the last year. The difference is if you own your home, that 8% increase is adding to your net worth, while if your renting, that 8% increase is adding to your expenditures.
With rents and home values increasing, 2018 is the year to switch to home-ownership.
The bottom line is as rents continue to climb along with home values, its better to be on the receiving end of the spectrum by owning where you live. The sooner renters make the switch to owning, the sooner they'll benefit from home values increasing, having equity in their homes, and no longer having to pay increasing rents.
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