As life evolves, so do your housing needs and financial priorities, making it worth evaluating if your current living situation is still the best fit.

If you’re renting, that may mean considering whether it’s time to buy a home, a move that may provide many long-term benefits. Here are three key questions to ponder to help you make a more informed decision.

What does the current rental market look like?

Traditionally, renting has been seen as a more economical choice than buying a property. In recent years, however, rent has increased by almost 30 percent, with the key influences being inflation, wages, and consumer spending patterns, all of which have changed dramatically since the pandemic. There’s also been a continually high demand for scarce housing options, leading many landlords to drive up prices and leaving renters to contend with higher-than-normal costs.

Still, every renter knows that prices can rapidly change as the economy shifts, so make sure to evaluate the market in your area to see which way it’s trending. For instance, when apartment-building construction increases and more houses are put up for sale, rental demand can ease slightly, leading to less strain on renters thanks to greater available housing. Regardless of the market, though, always keep in mind that your lease will likely increase with each renewal, requiring you to either revisit your financials or try to find another apartment for less. And the reality of renting remains that you don’t own a tangible asset that builds value over time—you’re simply paying for someone else’s property.

Is renting still cheaper than owning a home?

There’s no easy answer to this because, ultimately, it may or may not be. The biggest factor will always be the golden phrase in real estate: location, location, location. Metropolitan areas, for instance, generally feature exorbitant home prices for many reasons, such as low inventory relative to the growing population in recent years, leading to increased prices as sellers take advantage of demand and buyers try to outbid the competition. So if you’re currently renting an apartment in a high-cost-of-living city, buying a house in the same area wouldn’t necessarily be the more cost-effective option for you; it could just end up considerably increasing your monthly expenses.

But if you’re willing to move to a less sought-after and populated location, homeownership just may be the solution to lowering your living expenses. The key is to look at the buy-to-rent ratio for places you may be considering, which compares the typical monthly mortgage and rent payments in that area. You can calculate it by finding the current average home price and rental price and dividing the former by the latter. The locations with a lower number typically would be better ones to buy than rent in.

What are the benefits of being a homeowner?

As noted earlier, renting often has little to no financial benefit since you don’t own the property. Meanwhile, owning a home allows you to build equity, meaning that with each mortgage payment, you’re lowering the gap between what you owe on your home loan and what your property is worth. This can create greater financial security, especially considering that real estate typically appreciates. In this way, the money you invest in your house is likely to yield large returns should you sell down the line.

Equity may be one of the biggest benefits of being a homeowner, but there are plenty of other upsides as well. It could also allow you to take advantage of certain tax deductions, enable you to build your credit, and help you to better budget your monthly expenses, particularly if you have a fixed-rate mortgage. And on a personal level, it can lead to increased privacy and overall independence in making your own decisions when it comes to your living situation.

Take these questions into consideration as you consider whether to continue renting or make the leap to buy a home. Although the decision ultimately relies on your unique situation, homeownership is generally a smart investment choice. Not only can purchasing a home positively impact your financial status, quality of life, and future goals, but you also won’t have to rely on the volatility of the rental market.

Reach out to a real estate agent, who can help you evaluate your budget and options to determine the right move for you.