Rent Prices Rose in May: Time to Stop Paying a Landlord and Buy?

Did your rent go up this month? If so, you're not alone. But does it make sense to consider owning instead of paying rent?

The upside of renting a home instead of owning one is not having to deal with maintenance, repairs, property taxes, and the other issues homeowners have to grapple with regularly. The downside, though, is that your rent has the potential to climb.

That's precisely what happened in May. Despite the fact that millions of Americans are still unemployed and the economy is still shaky, rent prices rose on a national level, reports Rentable. Specifically, the price of one-bedroom homes increased 0.62% to a median of $1,131, while two-bedroom homes rose 0.36% to $1,387.

But in some markets, those price increases were a lot steeper. Take Norfolk, Virginia, where the median one-bedroom unit rose 6.87%. And in Dayton, Ohio, the price of a one-bedroom home rose 5.65%.

If you're tired of seeing your rent go up every year, you may be considering buying a home. That way, you get to lock in the same monthly mortgage payment for as long as you own that property. But while it's true that you can lock in a fixed loan for many years when you buy a home, your housing costs may not be as predictable as you'd think.

Homeownership costs can rise, too

Many people assume that once they stop renting, they'll get the security of predictable monthly housing costs. But in reality, that's generally not what happens.

There are many costs associated with homeownership that have the potential to fluctuate from year to year, or even from month to month.

Let's start with property taxes. Though your taxes can generally only go up once a year, you may find that your tax bill increases as your property gains value (though your taxes can also decrease if your property loses value).

Then there's homeowners insurance. The premium you start out paying won't necessarily be the same premium you pay for as long as you own your home. Even if you don't file too many claims against your policy, if other homeowners in your area do, that alone could drive up your premium cost.

Plus, you'll have maintenance and repairs. The cost of upkeep can change over time, especially if you outsource a lot of maintenance work. And repairs are truly unpredictable -- you never know when something in your home might break, or when a weather-related event might cause exterior damage that your homeowners insurance won't fully cover.

That's why you shouldn't assume that going from renting to owning will make your housing costs more predictable. If anything, the opposite might happen.

Of course, there are still plenty of good reasons to own a home rather than rent. When you own, the money you pay each month will help you pay off an asset you get to keep. And as a homeowner, you don't have to follow a landlord's rules. You can paint your rooms any color, get a pet, or do whatever you please within the walls of your property.

But if your goal in buying a home is to avoid having your housing costs go up, you may want to rethink that. While rent prices may continue to rise, the good news is that most leases are signed on a yearly basis, so you'll be guaranteed the same cost for 12 months at a time. And remember, you can always attempt to negotiate a rent hike if it's unreasonable or doesn't work for your budget.