Rent vs. Buy in 2025: Is Now the Right Time to Purchase a Home in California?

🏡 Should You Rent or Buy in 2025? A Mortgage Broker's Honest Breakdown

Excerpt:
With rates in the 6–7% range and home prices still climbing, many clients ask, “Is now the right time to buy?” If you're wondering whether to rent or purchase, this article breaks down the real math behind buying—whether you're a first-time buyer, move-up homeowner, or aspiring investor.

Should You Rent or Buy? Let’s Break It Down

With mortgage rates hovering around 6.75% and home values still strong, it’s no surprise that buyers are hesitant. As a mortgage broker with over 35 years of experience, I get this question every day:
"Should I rent or buy right now?"

My short answer?
Buy when you can afford it.

But here’s the long answer—and it’s where smart financial decisions get made.

🧮 Scenario 1: The First-Time Buyer (5–15 Year Horizon)

Let’s say:

• Purchase price: $550,000

• Down payment: 5% ($27,500)

• Loan: 30-year fixed at 6.75%

• Monthly payment: Approx. $4,500 (including taxes, insurance, HOA)

Why Buying Wins:

• Appreciation: At 6% annual growth, that $550K home could be worth $1.35M in 15 years.

• Tax Benefits: Deduct mortgage interest and property taxes.

• Equity Growth: Rent doesn’t build wealth—mortgages do.

• Refinance Potential: If rates drop to 5%, payment could drop to ~$3,800.

• Rent Escalation: That $3,200 rent today could rise to $4,300 in 10 years.

Best Line: “Buy now, lock in appreciation, and refinance later—renting just pays someone else’s mortgage.”

🏠 Scenario 2: The Move-Up Buyer

You’re selling a $550K condo with a low-rate loan and want to buy a $900K home.

Situation:

• Sale proceeds: ~$200K equity

• Down payment on new home: 20%

• New mortgage: $720K at 6.75%

• New payment: Approx. $5,900/month

Why Buying Wins:

• Leverage More Appreciation: The new home could grow to $2.2M in 15 years.

• Bigger Tax Write-Offs: More interest = more deductions.

• Refi Potential: When rates fall to 5%, payment could drop to $5,100.

• Equity Jump: $2,500/month higher payment = $4,444/month in appreciation gain.

Best Line: “Leverage your equity into a more valuable home now. Waiting may cost you more in taxes and price jumps.”

🏘 Scenario 3: The Investor-Minded First-Time Buyer

You want to buy, move up later, and keep your first home as a rental.

Purchase Plan:

• Price: $550,000

• Down: 3% ($16,500)

• Payment: ~$4,700/month

• Timeline: Hold for 10 years

Why It Works:

• Build Equity While Living There: ~$75,000 paid down on principal

• Appreciation Potential: Home could be worth $1M in 10 years

• Rental Income Later: Could generate $1,200–$1,500/month in positive cash flow

• Refinance for Cash-Out: Use it as leverage to buy property #2

Best Line: “Start small, build equity, and grow your portfolio one smart buy at a time.”

Why Now Might Be Smarter Than Waiting

✅ You’re building your wealth, not your landlord’s
✅ Rents rise over time; mortgage payments can fall with a refinance
✅ Real estate remains a powerful hedge against inflation
✅ Delaying may mean chasing rising prices and higher down payments later

📉 Current Rate Environment

Mortgage rates are at a 26-day low, and while we don’t root for a weaker economy, soft economic news historically brings rates down. Timing your refinance or purchase can be strategic—especially with expert guidance.

🧰 Loan Programs We Offer (Highlights)

✅ FHA, VA, USDA – starting in the high 5% range
✅ Conventional up to $806,500 – mid 6% range
✅ High Balance Loans to $1,209,750 – still in the 6s
✅ Jumbo Loans – generally 6–7%
✅ Bank Statement Loans – 10% down, great for self-employed buyers
✅ Profit & Loss Loans – no bank statements needed
✅ 0% Down Loans – available up to $1.3M with 620+ FICO
✅ Bridge Loans – helping you move fast at ~7.99%
✅ DSCR Loans – investment properties with 15% down
✅ 3/2/1, 2/1, 1/0 Buydowns available

Interest rates are subject to change. Loan limits based on LA County.

💬 Let’s Talk Strategy

At Mojave River Mortgage, we’re here to help you crunch the numbers and explore your options—whether you’re renting, buying, moving up, or investing. Don’t let interest rates scare you out of wealth-building opportunities.

Let’s turn renters into homeowners, and homes into investments.