As an already sluggish U.S. housing market takes a nosedive into what’s expected to be an even chillier fall market than usual, more would-be buyers are pulling back and renting instead.

Even though home ownership is usually held up as an ideal standard for the “American dream” and is a top contributor for wealth building in the U.S., today’s high borrowing rates and record housing inaffordability levels are bolstering the argument for choosing to rent rather than buy — at least for now.

Everyone’s financial situation is different, and it’s worth weighing your short- and long-term needs and goals before making this decision for yourself. But here are five reasons why it makes more sense to rent rather than buy a home right now:

1. Rent is falling across the U.S. for the first time since 2020

A May report from the real estate site Realtor.com shows the national median rent fell 0.5% from a year ago, the first decline since the COVID-19 breakout in 2020. In July, Realtor.com reported a continued decline in year-over-year rent prices for studio to two-bedroom properties, down 1% that month from a year ago, “driven in part by a rising rental supply.”

Realtor.com’s midyear forecast noted a surge in multi-family unit construction and an uptick in vacancy rates, so the site’s chief economist, Danielle Hale, said she expects “downward pressure on rent prices will continue, providing many renters with much-needed stability in their housing expenses.”

Given current rental market and seasonal trends, she said it will be “very unlikely to see a new peak rent in 2023.”

“Renters in many areas are now spending slightly less on rent relative to their overall income, giving their budgets a little more breathing room at a time of stubborn inflation and ongoing affordability concerns,” Hale said in an Aug. 21 statement.

2. In Utah, it costs more than twice as much to buy than rent

Today’s high mortgage interest rates — which are hovering well over 7% — have had dramatic and devastating impacts on the cost of buying a home.

Consider these calculations: In Utah, the total mortgage payment for the median priced home ($494,250) purchased in the second quarter of 2023 hit a staggering $3,750 a month, according to estimates by housing experts at the University of Utah’s Kem C. Gardner Policy Institute. That includes property tax, home insurance and private mortgage insurance while also factoring in a 5% downpayment of $24,713.

In contrast, the average rental rate for all types of units in Salt Lake County was $1,570 in 2022, the latest full year of data, according to the Kem. C Gardner report. Greater Salt Lake area rental rates are trending slightly higher so far in 2023, to an average of $1,585 a month, according to a recent midyear report by the firm CBRE.

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3. It’s more financially prudent to rent than buy, experts say

Nationally, experts are saying renting may be more financially prudent amid today’s high mortgage rates, CBS News recently reported. Plus many would-be homeowners are simply forced out of the choice as homeownership becomes increasingly out of reach for the average American earner.

Salt Lake City, Utah, ranked No. 6 in the top best cities for renting compared to buying in a recent analysis by the site Home Bay, now owned by the real estate company Clever Real Estate.

Estimating Salt Lake City’s typical home value at $520,842 and a typical annual rent of $20,697, the analysis deemed Salt Lake City as the city with the lowest annual rent cost compared to other cities with high price-to-rent ratios, or those where it’s better to rent than it is to buy.

It’s also possible Utah’s home prices could come down this winter, though how low they go depends on economic factors and what happens to interest rates. For now, though they dipped slightly in August, they’re still very high.

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4. Home price growth has been outpacing rent growth

Every market included in a recent Home Bay/Clever Real Estate analysis showed home price growth has been outpacing rent growth from January 2016 to January 2023. Nationally, home price growth has outpaced rent price growth by almost 70% in that time period, the report states.

The Salt Lake metro area has seen rent grow 58.5% from 2016 to 2023, while home prices grew 93.3% in the same time period, according to the analysis.

5. ‘Phantom costs’ or unexpected home expenses

Ramit Sethi, host of the Netflix series “How to Get Rich,” calls them “phantom costs,” or unexpected home ownership costs that renters usually don’t have to worry about.

“I call them phantom costs, because they’re mostly invisible to us until they appear,” Sethi said, per CBS News. “I actually add 50% per month to the price of owning. That includes maintenance, including a $20,000 roof repair, eleven years from now, that I don’t even know I have to save for yet.”

When factoring in whether to buy, Sethi recommends potential homeowners need to weigh the total cost of owning a home, including maintenance and repair costs, and not just the monthly mortgage payment.

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Yes, but: The argument for ownership and a forced choice for renters

Traditionally, it’s recommended that buying rather than renting is a wiser long-term financial decision if you’re planning on staying put for a while. Owning, considering you can maintain your employment and continue to afford your monthly mortgage payment, does offer more stability and a financial investment into an asset.

There’s one big problem, however. More and more Americans have simply been priced out from the dream of homeownership. And the issue is especially sharp for Utahns. In the second quarter of 2023, the median income household in the Salt Lake City metro area could only afford about 21% of the homes sold in that area, according to the most recent  “State of the State’s Housing Market” published by the Kem C. Gardner Policy Institute.

Utah housing experts wrote homeownership is a “fading dream” for many renters. They calculated only 15% of Utah’s renter households have enough income to purchase a modestly priced $300,000 to $400,000 home. Meanwhile, there doesn’t appear to be much hope for them in the future as high interest rates and high home prices continue to “exclude a growing share of renters from home ownership.”

Meanwhile, rent prices are going up too.

“These long-term renters will face a rental market with rising rents and low vacancy rates,” the report states. “The average rental rate in Wasatch Front counties has increased at a rate of 6.5% to 7.0% annually since 2011, nearly double the rate of increase in the median income of renters.”

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