The Phoenix area boasts year-round sunshine, a vibrant arts scene, and diverse culinary options, making it an attractive destination to call home. If you’re considering moving to Phoenix, then you may be wondering whether to rent versus buy a home in the area. Even in today’s real estate market, there are pros and cons to consider if you’re renting or buying a home in Phoenix, making it that much harder to decide what fits your goals.
If you’re looking to buy a home in Phoenix, the current median sale price for a home is $440,000 as of July. According to a recent Redfin study, the estimated median monthly mortgage cost is $3,464 while the average rent price in Phoenix is $2,765. For many potential homebuyers, this means renting a home costs less than buying a home in today’s market. However, it’s important to know that there are many reasons why buying a home now may be the best choice for you.
At the end of the day, making the decision between buying a house or renting an apartment in Phoenix depends on a variety of factors. Whether that’s having flexibility in where you live or your financial goals, there are numerous factors that can help you make the decision. We’ll help guide you along the way as you make the decision between renting vs buying in Phoenix. That way, you can make the best decision for your goals.
Advantages of buying a home in Phoenix
Long-term financial benefits
One of the biggest advantages to buying a home is the opportunity to build equity and the long term benefits that go along with homeownership – whether it’s a home, condo, or townhouse. In my opinion, there ultimately is no bad real estate purchase when looking backwards. After 5-10 years whatever you thought was too high or too much interest ultimately is overshadowed by the market rise in pricing.
Arizona enjoys lower taxes and less home maintenance
Compared to other large cities across the U.S., popular markets like Phoenix and Scottsdale enjoy a lower tax rate. There’s also less maintenance required for homeowners due to xeriscaping.
Disadvantages of buying a home in Phoenix
Long commute times
A current challenge for Phoenix homebuyers is the commuting time. You can grab a great starter home, but you may need to add miles to your commute.
Determining if you are ready to buy a house in Phoenix
When deciding if now is the right time for you to buy a home in Phoenix, AZ, it’s crucial to approach the decision thoughtfully and consider several key factors that can help determine your readiness for homeownership:
- Financial stability: Before you start your homebuying journey, it’s important to have a good credit score and a stable income. Make sure you set aside some additional funds for down payment, closing costs, and additional expenses that go into the homebuying process. It’s also a good idea to build an emergency fund in case you have any unexpected expenses.
- Personal goals: You’ll want to think about your personal goals and assess your priorities before deciding to buy a home. Are you looking for a fixer-upper or a move-in ready house? Do you want a home with eco-friendly features or a historic home? Determine what’s important to you in a home and if buying a home in the Phoenix aligns with those goals.
- Housing market conditions: The housing market in Phoenix is somewhat competitive, so it’s important to understand the current market conditions and how much you can afford.
- Long term commitment: In comparison to renting an apartment, buying a home is a significant financial investment and time commitment. So, if you’re not sure you’ll be living in the Phoenix area for more than a few years, it may be better to continue renting vs buying a home.
If you’re unsure whether you’re ready to buy, consider consulting with your real estate or financial advisor to fully understand your options.
Is it competitive to buy a home in Phoenix?
I find that most buyers are competing with the news cycle, not the market. With a Compete Score of 51, the Phoenix housing market is somewhat competitive with some homes receiving multiple offers.
Advantages of renting a home in Phoenix
Ability to get to know the area
If you’re new to the Phoenix/Scottsdale area, renting a home gives you the flexibility to explore different neighborhoods and get accustomed to the weather. If you’ve never experienced an Arizona summer, it’s a good idea to test your ability to withstand the summer before buying.
No maintenance costs
Another advantage of renting in Phoenix is that you won’t have to worry about maintenance of the property. Typically, this is the landlord’s responsibility.
Disadvantages of renting a home in Phoenix
Risk of rent increasing
One of the biggest disadvantages to renting vs. buying a home in Phoenix is that your rent price can increase each time you renew your lease, and by a significant amount.
No equity to build
Renting a home doesn’t provide you with the same financial benefits as owning a home would. When you rent a home, your monthly payments go to the landlord rather than towards your own mortgage payment, and thus there’s no opportunity for building wealth.
Renting vs buying in Phoenix: A real estate agent’s final thoughts
In my opinion, it’s always a good time to buy a home in the Phoenix and Scottsdale area.
At the end of the day, whether you rent or buy in the Phoenix area is a wonderful place to call home. If you’re just starting to think about buying a home, make sure you’ve looked through your finances to understand what you can afford now and in the years to come.