Dennis Lynch of Rumson, New Jersey Explains If You Should Rent or Buy

Photo of author

( — June 2, 2022) —

Should you rent or should you buy?

Dennis Lynch of Dennis and Marshall Lynch Real Estate Consultants in Rumson, New Jersey cautions new home buyers to consider their long-term plans carefully as they make the best choices in a tough market.

Anyone looking for a place to live in New Jersey right now is navigating the most challenging real estate market in decades. The seasonally adjusted price of New Jersey homes in the middle tier has gone up 17.3% during the past 12 months. Rental prices for apartments have increased by an average of 10%.

While these price hikes are less than in many other markets, interest rates are now increasing, so the cost of homeownership is only going up, up, up. Housing expert Dennis Lynch recommends:

“If you are not sure whether you want to buy or rent right now, it is best to balance your decision between your long-term plans and your immediate financial means.”

Timing Is Everything When Considering Whether to Buy or Rent

Pandemic recovery has set the prices of everything from gasoline to groceries soaring, in addition to the cost of housing. Homebuyers are not likely to find any bargains until demand cools down, and the current inventory of houses for sale in New Jersey is the lowest it has been in years. 

The problem is that we do not know when the demand for new homes will level off. Buyers have been eager to take advantage of historically low mortgage interest rates, and now they are frantic to lock in relatively low-interest rates before they go even higher. 

Dennis Lynch advises that homeownership is less expensive over the long term, but it takes five to seven years to recoup purchase costs. If you do not anticipate staying in the same location for at least the next five years, renting now gives you the flexibility to take advantage of potentially more favorable markets later.

“If you are ready to settle down into a neighborhood for the next decade or so,” Dennis Lynch says, “this market could be a really great time to buy.”

However, if you are not sure whether you are staying in the same community, commuting to the same job, and keeping your kids in the same schools, it is probably best to rent for flexibility.

“Mortgage Rates Are Expected to Stay High,” Dennis Lynch Says

“If you are willing to wait,” Dennis Lynch says, “there may be better values on the horizon.”

The current prime mortgage rate is 4%. Dennis Lynch expects the prime rate to rise to 4.50%or higher by the end of the year.

Rising interest rates will push some buyers out of the housing market. Home prices may not fall, but the occasional great deal will emerge as fewer buyers are competing for the same housing stock.

If you can make a substantial down payment or if you have cash from the recent sale of a home and you are looking to buy up, setting your sights on a home purchase in late 2022 could be a great way to lock in prices that you will consider low ten years from now.

“Don’t expect stabilization and improvement in housing prices before the summer buying season is over,” Dennis Lynch emphasizes. “Be prepared to act in the fall when seasonal housing availability increases and you can get the most house for your money.”

If your best option right now is to rent, keep in mind that rental prices bottom out in the winter, most often between the months of January and March.

Dennis Lynch Provides the Expertise You Need to Make the Best Choices in New Jersey Real Estate

Purchasing a home is the biggest investment most people make. Every homebuyer needs the best possible guidance. With over a decade of experience in New Jersey real estate, Dennis Lynch knows the market that you need. He and his son, Marshall Lynch, make a dynamic team that can help you navigate a constantly changing market and the complicated landscape of home financing.