Pros and Cons of Renting Your Home Instead of Selling
Considering the landlord path? We put together a list of the pros and cons of renting your home and the pros and cons for selling it.
Typically, homeowners anticipating a move will seek to sell their current home, often needing the cash from the sale to help purchase their next home. Sometimes, circumstances have homeowners wondering what the pros and cons of renting your home are and whether it’s feasible to turn the old home into an investment funded by renters.
Get an Estimate on Your Home’s Value
It only takes two minutes to answer a few questions. You’ll receive a detailed analysis of your home straight to your inbox immediately. Simply tell us a little bit about your property (the address, type of property, it’s condition and the year it was built) and how soon you’re looking to sell.
Market overview for renting and selling
Rent prices and vacancies are stabilizing
After a sharp increase in apartment rents during the pandemic, U.S. rental markets are beginning to cool off. The national rental vacancy rate stood at 6.9% in the third quarter of 2024, around the same rate as the same period last year (6.6%), according to U.S. Census Bureau data.
When vacancy rates stabilize, rent prices tend to follow suit. Apartments.com reports that in October 2024, rent prices increased by 1% compared to last year. Hartford, CT, saw the biggest rent increase at 4.4%, followed by Buffalo, NY, (4.1%), and Providence, RI (4%).
The surge of new units that came to market in 2023 caused vacancy rates to rise and rent prices to fall in some markets, most notably the Sun Belt, where supply continues to outpace demand. A slowdown in building new apartments is expected in 2025, depending on market conditions at the start of the year. Apartments.com National Director of Multifamily Analytics Jay Lybik also predicts that half of the roughly 636,000 new apartments delivered by the end of 2024 can be expected in 2025. This construction slowdown could push rent prices higher by 2026 as inventory tightens.
The rental market looks stable for would-be landlords, but let’s look at the climate for selling your home.
Home sales slow down as mortgage rates and prices increase
Record-high home prices and elevated mortgage rates are dampening home sales across the country. However, inventory is gradually increasing as home sellers aim to capitalize on the equity they have rapidly accumulated since 2021. According to ICE’s Mortgage Monitor report, as of November 2024, the average U.S. mortgage holder boasts $319,000 in equity.
In September 2024, the National Association of Realtors (NAR) reported that existing-home sales fell by 3.5% year-over-year, reaching a seasonally adjusted annual rate of 3.84 million. The median price of an existing home climbed 3% to $404,500 — the 15th consecutive month of year-over-year price increases. Meantime, the 30-year mortgage interest rate hovered around 6.5%.
The inventory of unsold existing homes stood at 1.39 million at the end of September 2024, a 23% increase compared to the same period a year earlier. This equated to 4.3 months’ supply, which is indicative of a seller’s market. For context, a balanced market typically has 5 to 7 months of supply.
