I hear some versions of this question almost every week. A first-time buyer sits down with me, looks at the numbers, and says “Carl, with rates where they are and prices this high, is it even worth it? Should I just keep renting?” If they do not ask I assure you, they are thinking about it.
It’s a fair question and I take it seriously. Because rent really does look cheaper on paper in the short term. But when we map out the full picture not just month one but years two, five, ten and beyond the story usually looks different. Let me walk you through how I think about this, the same way I would if you were sitting across from me right now.
Here’s the thing about renting that doesn’t always get said plainly enough: every rent check you write builds equity for someone. Just not you. Your landlord is getting wealthier from your monthly payment while your financial position stays exactly where it is. When you buy, yes, your payment is higher right now. But every mortgage payment you make is building something. You’re accumulating an asset. Over time, that equity grows from two directions: the principle you’re paying down each month and the appreciation of the property itself. Those two forces, working together over years, that’s how ordinary people build real equity through real estate.
Neither outcome is guaranteed, and every market is different. But that’s the fundamental difference between the two options and it’s worth keeping front of mind when the short-term numbers feel discouraging.
Your payment stays put. Your rent won’t. One of the most underrated advantages of a fixed-rate mortgage is that your payment doesn’t change. Ever. You lock in a rate today, and that principal and interest number is the same in year 1 as it is in year 30. Most people don’t fully appreciate how powerful that is until they’ve been a homeowner for a few years and watched their friends’ rents go up 10, 15, 20 percent.
Renters are completely at the mercy of the market and in most cities, that market has only moved in one direction in the long run. Rent hikes, lease non-renewals, being forced to move those costs and disruptions are real. A fixed mortgage eliminates payment increases. And as your income grows over time, that fixed payment starts to feel easier.
Rates are higher right now. That doesn’t mean they stay that way. I hear a lot of “I’m waiting for rates to come down.” And I understand it. But here’s the practical reality, you can’t buy a home yesterday. You buy it today, at today’s price. If you wait for rates to drop and prices rise in the meantime then what, the math may not work in your favor the way you’re hoping.
What I advise clients is this, you’re buying a home you plan to live in for years. If rates come down and they may over time you refinance1. You lock in a lower rate at that point. But you can’t go back and buy the house at today’s price later. That opportunity is right now. Refinancing1 is always an option down the road. Rewinding time on home prices isn’t.
Over the long term, real estate has historically appreciated in value in most markets. That’s not a guarantee markets go through cycles and no one can predict the future, especially me, but the long-term track record is meaningful. A home purchased today at a price that feels high may look like a bargain ten years from now.
And homeownership opens doors that renting doesn’t. Once you’ve built equity, that equity becomes a financial tool. It can fund home improvements, help a child with a down payment, or serve as a cushion during retirement. Real estate creates options. Renting doesn’t build any of that.
There’s also the ADU angle worth knowing about. In many markets, especially here in California, homeowners can add an Accessory Dwelling Unit, a separate living space on the same property. An ADU can generate rental income that offsets a portion of your mortgage payment. What looks like an expensive purchase today can look very different when part of the property is generating income. It’s not right for every situation, but it’s worth knowing it’s an option.
I know this sounds less “financial” than the other points, but I’d be leaving something out if I didn’t mention it. There is something genuinely different about owning your own home. You can paint the walls. You can remodel the kitchen. You can put down roots in a school district, a neighborhood, a community without wondering if your landlord is going to sell the building next year. Stability has real value. The ability to make a place truly yours has real value. These things don’t show up in a spreadsheet, but they matter to people’s lives in ways that are hard to overstate.
I’m not going to sit here and tell you it’s easy right now. It’s not. Higher rates mean higher payments. Higher prices mean bigger down payments. For a lot of first-time buyers, getting to the starting line takes real planning and real sacrifice.
What I’d say to that is: yes, it takes sacrifice. But so does every meaningful financial decision. The question is whether the sacrifice is worth it and for most people who plan carefully, stay within their means, and buy a home they can realistically afford, the answer has historically been yes. Not without difficulty, but yes.
The key phrase there is “a home they can realistically afford.” That’s the most important conversation I have with first-time buyers. Not whether to buy, but what to buy and when. My job is qualifying you for as much as possible, your job is spending as little of that as possible. Getting those numbers right your true budget, your realistic payment is what makes the difference between a decision you’re proud of and one you’re stressed about.
If you’re a first-time buyer trying to decide whether this market makes sense for you, here’s what I’d say, don’t let the headlines make the decision. Headlines talk about rates and prices in the abstract. Your decision needs to be based on your numbers, your income, your goals, and your timeline.
Sit down with someone who will give you a straight answer not a sales pitch. Run the real comparison between what rent costs you over five years versus what buying costs you over five years, including equity built, tax considerations, and what the market has historically done. Then make an informed decision.
That’s exactly the conversation I am having. No pressure, just a clear look at what the numbers say for your specific situation. If you’d like to have it, reach out. And ask us about our book “Borrow Smart, Repay Smart” it covers a lot of what first-time buyers need to know in plain, straightforward language.
Let’s Connect!
Have questions or ready to take the next step in your home financing journey? I’m here to help.
Call: (858) 526-3037
Email: carl.spiteri@originpoint.com
Carl Spiteri
Producing Partnership Branch Manager
NMLS ID: 286890
Licensed in: AZ, CA, CO, FL, ID, MI, MT, OR, TN, TX, WA, WY
- By refinancing, you may pay more in costs and interest over the extended term.
Applicant subject to credit and underwriting approval. Restrictions apply.
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