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Renting vs owning: big decisions for single parents

By: Mitch Mitchell
March 30, 2022

Buying a home is a massive undertaking for just about any family, but it can be incredibly daunting if you're a single parent. If you're afraid that there's nobody else to bounce ideas off of, research neighborhoods, or figure out a budget, remember that there are plenty of kind people and services out there to help you navigate your experience as a first-time homebuyer.

This article will look at the pros and cons of buying vs. renting to help you determine — as a single parent — if taking the plunge is a good idea for your family at this point. But first, let's touch on finances.


Breaking down the budget 

While prospective homebuyers stress about a slight increase in mortgage rates, it pays to remember that 15% interest rates were standard back in the early 1980s. Rates haven't been above 5% since 2010, and, just last year, the average interest rate was just 2.79%. So even if rates rise, they're not predicted to go above 4% in 2022. That means homebuyers and homeowners are still finding rates that make even today's high home prices affordable.

Don't forget that just as home prices have risen since the pandemic started, rents have risen, too. Check out our mortgage calculator to estimate your monthly payments for a comparison. Then speak with a loan officer who can dig into your finances to help develop a personalized homebuying budget to use as a guide.

Now, let's consider the advantages and disadvantages of buying a home versus renting as a single parent.


Renting vs owning: big decisions for single parents


Advantages of being a homeowner

Get a grip on housing costs.

Continue renting and you're at the mercy of a landlord who might raise your rent, evict you or sell the building outright. But when you buy a home with a fixed-rate mortgage, your monthly payments stay the same month after month, year after year. That consistency can help you plan and save for other expenses down the road. Sure, you might be taking on additional housing costs, like taxes and insurance, but those shouldn't change that drastically over time. 

Force yourself to save.

According to a recent Federal Reserve study, in 2019, U.S. homeowners had a median net worth of $255,000, while renters were at just $6,300. That's a 40X difference! It's clear that homeownership is one of the best ways to build wealth. As your home appreciates and you pay down the mortgage, you build equity in the property, something experts call “forced savings.” 

Lower your tax bill.

Another benefit of homeownership comes from taxes. If you itemize your annual deductions, you may be able to also reduce your taxable income by whatever you're shelling out for property taxes, mortgage interest and — sometimes — mortgage insurance. Just remember to speak to a tax pro before applying for a home loan solely on potential tax credits — they're different in every state.

Express yourself.

Renters usually aren't allowed to make any changes to their apartments. Some aren't even allowed to paint. If you take it upon yourself to go DIY, it'll probably come out of your pocket, not the landlords. But as a homeowner, you get to personalize your space in any way your sweat equity or budget will allow. Plus, if you're a pet owner, you have the freedom to let your furry companion live with you without asking for permission!  

Join an IRL community.

The feel-good benefits of getting involved with the local community is something that homeowners and renters can take part in equally. However, it is true that renters — especially younger renters — are more likely to move once or twice over ten or 15 years than homeowners will. That's why they call buying a home “putting down roots.”

Have a say in the school district.

When you're raising a family as a single parent, school district quality is a big part of the “where should we live” decision. It's great for kids to have a stable community with school chums that they can grow up with — they're putting down roots, too! So, it's important to be mindful of the school district you'll live in. Look for those that are well funded, safe and have plenty of extra-curricular activities to take the pressure off you as a sole source of supervision. Plus, you get the chance to build long-lasting friendships with the parents of your kid's classmates.


Advantages of being a renter

There's no stress about a payoff.

While buying a home is considered a good investment, there's no guarantee you'll see a profit down the road. Sure, paying down the mortgage and keeping up with home maintenance builds home equity, but there are a lot of factors that are out of your control. What'll the economy be like when you put it on the market? Will yours be one of many homes for sale at that time? Did a park or a parking lot get built near your home? These all could affect your resale price, causing your home to drop in value when it's time to sell. Renters don't have this over their heads.

Maintenance is not your job.

If you are a homeowner, you need to save and budget for home repairs that are bound to happen sooner or later. For renters, it's somebody else's problem. When it comes to the costs and the hassle of hiring someone to take care of repairs in your apartment, that's the landlord's headache. 

Moving is often easier.

Owning a home shouldn't keep you from changing jobs or transferring to a new city, but it's not as simple as just breaking your lease and dealing with the fallout. Maybe you're a renter who wants the option of being able to change things up if neighbors get too loud or the commute gets too long. Compared to homeowners, renters can usually act much quicker when making a move.

Fewer checks to write.

Renters, by definition, pay monthly rent. And many of them have to cough up for cable, utilities and — if they're smart — renters insurance. On the other hand, homeowners pay mortgage principal and interest, property taxes, homeowner's insurance, sometimes mortgage insurance, regular maintenance, security services and all the utilities mentioned above and then some. There are also homeowner's association (HOA) fees for condos or gated communities. So while there are many benefits to buying a home, homeowners tend to write more checks than renters do.


Ready to move forward?

As a single parent, you may be your family's sole breadwinner, but deciding whether to buy or rent is not a purely financial decision. There are emotional factors that go into it as well. If you need help weighing the pros and cons, please don't hesitate to reach out. 

Movement Mortgage exists to love and value people, and we'd love to help you determine if buying is the right move for you and, if so, what you can afford. To get started, find a loan officer in the area you and your family are looking to call home!

black and white photo of Mitch Mitchell
Author: Mitch Mitchell

Mitch Mitchell is a freelance contributor to Movement's marketing department. He also writes about tech, online security, the digital education community, travel, and living with dogs. He’d like to live somewhere warm.