|Whether to rent or buy is a common debate for Americans looking for a new place to live. The arguments are well known. Renters say it’s cheaper, if only because there are no upfront expenses like a down payment or closing costs. Homeowners, on the other hand, will point to the long-term financial benefits of owning a home, including equity and wealth creation.
Ultimately, what you choose will be determined by factors specific to your life, goals and finances. However, homeownership is clearly winning the debate on one key issue according to a new survey from Freddie Mac. The survey results found that, “34 percent of renters spend more than one-third of their income on rent, while only 25 percent of homeowners spend that much on their mortgage.”
In other words, though renters often view renting as the more affordable option, they are also spending a larger percentage of their monthly income on housing. Additionally, the survey found that 62 percent of renters said they have had to reduce spending on non-essential items to be able to afford their monthly payment. This is in contrast to just under half of homeowners doing so.