Money·3 min read

Skimm Money: Renting Vs. Buying, Raises, And HSAs

couple talking to real estate agent
Feb 27, 2023

Eyes On

Renting vs. Buying

Mortgage rates are climbing. Which, combined with a low supply of homes, means many prospective buyers are opting out of the market. In the coming year, the outlook could be rosier for tenants — rent in major US cities has fallen over the last six months. However, the average tenant still spends 30% or more of their income on rent, according to a recent Moody’s Analytics report. Even millionaires are renters these days. With housing costs on the rise, here’s what to consider when deciding whether to rent or buy.

Your move:

  • Ask the big questions. How long will you live in your home? Are you ready to take care of a house (hi, burst pipes)? How could climate change affect your property?

  • Figure out what you can afford. Beyond a down payment, consider property taxes, closing costs, and maintenance fees. Calculate your monthly mortgage payments, utilities, taxes, and homeowners insurance.

  • Consider the short-term. Generally, you shouldn’t buy a home unless you plan to live there for a few years. Remember, buying a house isn’t the only way to build wealth.

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5-Minute Money Tip

Max out your HSA before Tax Day.

If you have a high-deductible health insurance plan, you could be eligible for a health savings account, aka an HSA. A major pro: It’s triple-tax advantaged. Your contributions aren’t taxed, your investments grow tax-free, and it can help reduce your taxable income. Take advantage and contribute the max (in 2022, up to $3,650 for individuals) before Tuesday, April 18. You can thank us later.

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