The decision about renting vs owning in DC & the metro area is a highly personal one. It includes many factors such as the status of your savings (or access to gift funds from a family member or friend), preference for housing location, income, job stability, and/or expected length of residency in your geographic location, as well as many others.
The DC Area Housing Market
Here in the Washington DC area, we are blessed with a relatively stable economy and housing market.
While we see shifts and changes in the market at times, the DC market has been mostly consistent compared to other cities around the country and has progressed without major declines.
This stability can be attributed to a wealth of federal jobs, which provide steady incomes and strong job security. The DC area also has an extremely high percentage of residents with college degrees, which generally translates to higher incomes. According to the US Census Bureau, The Washington, DC, metro area had the highest median income in the United States at just over $93,000 (the San Francisco area was #2). Additionally, the Washington DC area sees many people moving in and out of the area each year from other towns and cities. These factors combine to sustain a healthy housing market, even in the midst of national economic problems.
When Owning Makes Sense
Generally speaking, if you are planning to live in a certain location for at least five years and you have a stable income, you should consider making a home purchase and owning. Right now, interest rates are still historically low, making money “cheap” and allowing for lower monthly payments. Also, owning your home saves you money in taxes, which can be enjoyed on your total tax bill or can be adjusted for each paycheck based on your deductions.
Renting Woes in the DC Metro Area
Rents are also on the rise in the DC area, making buying a home an even more attractive prospect. Since more would-be first time homebuyers are “waiting out” the economy and housing market problems, the rental market has become saturated, making renting more expensive and more difficult. In previous years, when the rental market was not as strong, renters had more flexibility in negotiating for a lower price and often were not competing with multiple applications. Today, most properties see multiple rental applications. This competition allows landlords to be more selective and causes more difficulty for renters, especially those who have pets or less than perfect credit.
Conversely, purchasers are still getting great deals on home purchases. As mentioned previously, they have the opportunity to buy with the lowest interest rates in history. While we are starting to see some multiple contract situations and even some escalation clauses for home purchasers, these are still not the norm. Buyers can still find good properties at good prices.
If you are debating about renting vs owning in DC, it is always a good idea to talk to both a real estate agent and a lender to review all the options. See what makes the most sense for your personal and financial situations at the given time.
If you are moving to DC with the military, be sure to read our article “A Military Move to DC: Buy or Rent?”
Want to Talk More About Renting vs Owning in DC & The Metro Area?
If you have any questions about renting vs owning in DC or buying for the first time or the DC housing market in general, please don’t hesitate to reach out. We are always happy to talk about your options and what makes the most sense for you.
For more articles like this one, sign up for our weekly blog roundup.