Buying a home is one of the biggest purchases you’ll ever make in your lifetime — and it’s about to get even pricier. According to a new real estate market report from Zillow, the median home value is now $200,400 — a record high.
Although the number of new listings coming onto the market has stayed relatively consistent over the past few years, the uptick in price is mostly being driven by white-hot buyer demand — people have been snapping up houses as soon as they are available.
Zillow broke down the percentage gains in the 25 largest U.S. metropolitan areas and found that home values were increasing the most in these cities:
1. Seattle: +13.1%
2. Dallas: +10.5%
3. Las Vegas: +10.2%
4. Tampa, Florida: +10.1%
5. Orlando, Florida: +9.6%
If you’re not on the market to buy but think you’ll want to sign a new lease in the next few months, the report wasn’t all bad news. Zillow found that median rent has only gone up by 1.1% to $1,422 a month, and 12 of the 35 largest metro areas actually saw a decrease. Here are the five cities experiencing the biggest declines.
1. Pittsburgh: -3.9%
2. Houston: -2.8%
3. Miami-Ft. Lauderdale: -1.9%
4. New York: -1.6%
5. Detroit: -1.6%
But whether it makes sense to rent or buy is about a lot more than just home price. You have to think about factors like how long you plan to stay in your home, how much of a down payment you can afford (we like to say at least 20%!), and whether you’re ready to take on the responsibility of homeownership (remember, you won’t have a landlord to call anymore when your air conditioning breaks).
If you’re unsure if homeownership is the right next move for you, check out these key questions to ask yourself before making the decision. (And while you’re at it, take a look at the home-buying decisions people end up regretting the most).
Think you want to keep renting until the time is right? Here are eight times when it’s smarter to rent than buy.