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Should You Rent or Buy Your Next Home in Retirement?

June 4, 2021

From the Kiplinger website

The housing market is hot, and it’s a great time to sell your home. Still, if you’re thinking about renting your next one, consider the tradeoffs. Renting temporarily is fine if you want to try a new location or if you anticipate moving frequently early in retirement. But the longer you rent in retirement, the riskier it becomes. Buying a home usually makes more sense if you plan to stay put at least five to seven years—long enough to recoup the costs of buying and selling the property. 

The temptation to rent now is understandable. In January, renting was cheaper than buying in 34 of the largest 50 U.S. cities, according to Realtor.com, where you’ll find sale and rental listings. In those cities, the median monthly rent of $1,727 was $261 less than the monthly mortgage payment of $1,988 for the median-priced home. Over the past 20 years, rent has increased an average of 3% annually, according to the Bureau of Labor Statistics. 

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