SAN ANTONIO – With interest rates the highest we’ve seen since 2000, is it better to rent or buy a home these days?
According to Nerd Wallet, the average 30-year fixed rate in San Antonio is 7.24%.
With high interest rates coupled with still-elevated home prices, consumers are asking what makes better sense for their budget.
“Mine was close to 6%, and I went from an $1,800 a month (rental) payment to a $3,300 a month (mortgage) payment. But I knew back then that it was important for me to start investing in my future and that 10 years later has paid off tremendously,” said Ronnie Trevino, a real estate agent with Keller Williams Heritage.
Trevino knows first hand all of the expenses that come with owning a home and how a mortgage payment can cost more than rent.
“We have to educate buyers on why it is that they’re buying and the strategy of buying versus renting,” Trevino said.
He has seen the highest of the highs.
“Back during the pandemic, we were basically taking orders. There were so many people that just wanted to buy housing,” Trevino said.
And he has seen the lowest of the lows.
“I don’t have any fears, locally. I started the business in 2008, when we had the biggest real estate crash of the nation. And I’m not seeing that same pattern today,” Trevino said.
What we are seeing now are the effect of interest rates on people buying and selling.
“People don’t want to give up 3% mortgages to get a 7% mortgage. And so, that’s helping keeping the housing prices up,” said David Macpherson, a Trinity University economics professor.
Macpherson said housing prices could continue going down.
“There’s already been a slow decline in housing prices. It’s just not as rapid as one would think would happen given the hike in interest rates,” he said.
It seems like the San Antonio market is insulated from real estate chaos – but there are cities across the country not so protected -- the thought is that housing prices are too still high – and there is a lot of room for them to come back down.
" I’d be more inclined to rent and save at a higher savings rate because rents have come down too. Just not as much as housing. I mean, like single-family homes have,” Macpherson said.
But like most matters – it’s not always best to try and time the market.
If you are looking short term – renting could actually be more cost-effective, especially when you factor in closing costs and any home repairs. But long term – a house could be a safe investment.
“You’re saving for the future and you’re putting your money into an investment just like you would a 401k,” Trevino said.