In today's housing market, deciding whether to rent or buy a home is more complex than ever. With mortgage rates hovering around 7% and home prices remaining elevated, affordability is a significant concern for prospective buyers.
On the other hand, while rent prices have stabilized or even declined in some areas of the country, they still consume a substantial portion of household income. Let's delve into the current market conditions to help you make an informed decision.
Current Mortgage Rates and Home Prices
As of May 2025, the average 30-year fixed mortgage rate stands at approximately 6.88%, a slight increase from earlier in the year. This uptick in rates has kept monthly mortgage payments high, making homeownership less accessible for many. Additionally, home prices have not seen significant declines, maintaining the elevated levels reached during the pandemic housing boom.
Renting: A More Flexible and Affordable Option?
Renting offers flexibility, especially for those uncertain about their long-term plans. In cities like Chicago, the average rent for a one-bedroom apartment is around $1,948 per month. While this is higher than the national average, it still represents a more affordable monthly expense compared to the costs associated with purchasing a home.
Likewise, renting eliminates expenses such as property taxes, maintenance and homeowners insurance, which can add up quickly for homeowners. For individuals prioritizing mobility or those not ready to commit to a long-term investment, renting remains a practical choice.
Buying: Building Equity Amid High Costs
Homeownership allows individuals to build equity over time, providing a sense of stability and potential financial growth. However, with current mortgage rates and home prices, the initial costs are substantial. For instance, the median monthly mortgage payment, including principal, interest, taxes and insurance, is approximately $3,426, significantly higher than the median rent of $2,100.
Despite these high upfront costs, buying a home can be advantageous for those planning to stay in one location for several years. Over time, homeowners may benefit from property appreciation and the eventual elimination of mortgage payments, leading to long-term financial gains.
Market Trends and Future Outlook
The housing market is showing signs of stabilization, with some experts predicting modest price growth in the coming years. However, affordability remains a concern, especially for first-time buyers. While mortgage rates may decrease slightly, significant drops are unlikely in the near term. Therefore, potential buyers should carefully assess their financial readiness and long-term plans before committing to a purchase.
Assessing Your Personal Situation
Deciding whether to rent or buy this year depends on individual circumstances including financial stability, career plans and personal preferences.
- Renting may be suitable for those seeking flexibility, lower upfront costs and fewer responsibilities related to property maintenance.
- Buying could be beneficial for individuals with stable finances, a long-term commitment to a location and a desire to build equity.
Whatever path you choose, make sure it's one that fits your life—not just the market. Whether you rent or buy, your home should work for you, not the other way around.
Buying with Confidence: OMB Bank Home Loans
If buying feels like the right move for you, OMB Bank is here to make the process smoother, smarter and more affordable. With a full suite of home mortgage solutions, we can help you find the right fit—whether you're a first-time buyer or looking to refinance.
Our lending officers work directly with you to evaluate your goals, explain your options and guide you through every step, from application to closing. We proudly offer:
- Competitive fixed and adjustable-rate mortgages
- VA, FHA and USDA loan options
- Local decision-making and personalized support
- Fast and free pre-qualification so you can shop with confidence
Explore more on our website and take the next step toward ownership on your terms.
OMB and its affiliates do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decision.
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