Families and households with high incomes
may have flexibility in determining whether
they prefer to buy or rent their homes,
where they want to live, what amenities
they want to live near, choice between
sources of financing, and the ability to save
through purchasing less housing than they
can afford. On the other hand, low-income
families have little of that flexibility and
may have their choices further limited by
the consumption patterns of those with
higher incomes.
The decision of a particular family to rent or purchase their housing relates to the broader market and their
individual situation but is also tied to the economy beyond the housing market.
To Buy or Rent?
The decision of a particular family to rent or
purchase their housing relies on many
factors that relate to the broader market
and their individual situations. These wideranging market-based factors are tied to
the economy (beyond the housing market)
as well as macro-drivers of housing supply
and demand, which includes current
interest rates and lending practices.
Individual factors include a family’s
current savings, current and
projected earnings, the length of
time the family plans to stay in one
place, and costs beyond the
mortgage or monthly rent (e.g.,
property taxes and homeowners
association dues for homeowners,
and security deposits or
maintenance fees for renters), as
well as other factors.
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