Owning a home may be the ultimate symbol of financial stability, but there are plenty of reasons to keep renting. Now that home prices have tumbled from their highs, more people are trying to take advantage of the weak economy and buy a house. Before jumping in, it's important to remember that home ownership can increase your living costs and tie up your cash. Consider these six potential issues: Financial risks: Contrary to popular belief, home prices don't always go up. Even if prices decline at double-digit rates, it's impossible to know if prices will rebound or keeping falling. Getting stuck: Most people who purchase a house plan to live in that city for a significant amount of time. What they often don't realize is that if circumstances change, they might be stuck if they want to move. For example, if you lose your job, it might make sense to move to an area with more professional opportunities. However, if the city in which you live is in decline, it may be tough to sell your house. While it's easy to pack your things and move out of a rented apartment, selling property requires more planning and time. Maintenance: Owning a house requires regular repairs and upkeep, which landlords typically take care of when you rent. Delaying maintenance when you own isn't always an option. Longer commutes: Houses becomes more affordable the further away they are from a city. If you must move to distant suburbs to be able to buy a home, your commuting expenses would likely rise along with the time it takes to get to work each day.
Additional costs: People often compare rent with mortgage payments when trying to decide whether to own. They forget that homeowners also pay property tax, buy insurance and make repairs. They might need to purchase appliances and lawn equipment they typically wouldn't need as a renter. When it's time to sell, it might be necessary to make costly upgrades and hire a realtor, who will charge a commission. Cash might be difficult to access: People who view their homes as investments must sell them and move to cheaper properties and regions to reap the returns. If they can't sell, they might have to resort to home equity loans or reverse mortgages to access cash. If you put all the extra money you save by renting into your retirement account, you might be able to save more money than you would have by owning a house.