America has an affordable housing crisis, and that is as true in San Diego as anywhere else. In fact, with sky-high rent in many San Diego neighborhoods, renters are particularly struggling here. This is true of low-income and high-income earners.

But is there an alternative? It is not just the price of rent that has been rising. The cost of homeownership has been steadily going up. Houses are overvalued and mortgage rates are high.

You also have to consider associated expenses. A homeowners insurance policy is a non-negotiable monthly bill. It is an added cost that you cannot afford to neglect in your calculations.

So, with rent so high, is it possible that buying a home is more affordable? Here are some things to consider.

Paying rent into a void

One reason renting is seen as unaffordable and unsustainable is that you leave with nothing once the lease is up. You may have paid tens of thousands of dollars for living in the unit, but you never owned an inch of it.

This is in contrast to buying a home. When you buy a home, you will have payments that may equate to or even be more expensive than the price of rent. However, they all contribute towards your ultimate ownership of the home.

Any comparison between the cost of rent and homeownership needs to be considered in this context. We’ll see that renting is consistently cheaper, but that does not mean it is worth it.

Homeownership requires cash upfront

To rent a home, you may need to pay some cash in advance for rent and a security deposit. But when buying a home, you need to put down a significant deposit in order to secure an affordable mortgage.

The upfront expenditure does not end there. You will also need to spend thousands of dollars on transfer fees. This includes things like paperwork and legal services.

The simple reality is that many people cannot afford homeownership for this reason. While you may qualify for a home loan, being able to afford to take advantage of it is far from guaranteed.

Maintenance is expensive

Another factor that makes it more difficult to own a home is that you have to take care of maintenance yourself. If something goes wrong, you cannot just call your landlord. Rather, you have to source a contractor to take care of it and these services are more expensive than ever right now.

You may be able to get by without taking care of some of the maintenance. However, doing so only leaves you vulnerable to much higher costs further down the line. Your home loses value and you have to spend thousands of dollars to make it comfortable again.

Prices may crash

Whether you can afford to buy a San Diego home or not, this may not be the best time to do so. Housing prices have been on a steep upwards trajectory over the past two years. This has been due to factors like low supply and low mortgage rates. However, mortgage rates are particularly high and are leading to a much lower demand for housing.

Housing price corrections have already begun. There is fear of a potential crash, but regardless of whether that occurs, the reality is that prices are going to drop. Buying a home in San Diego now means paying more than you would in a few months. You’ll also have to deal with higher mortgage rates than any in recent history.

Renting a home is becoming unaffordable in San Diego, as we face an affordable housing crisis. However, this does not mean you should buy a home instead. While it is certainly more palatable to put your money into something you will eventually own, it may be worthwhile waiting to see if prices come down.