For many Americans, homeownership represents financial security and stability. Instead of spending thousands on rent each month with no return, owning a home allows people to build equity and potentially profit from appreciation. However, the reality of buying a home—especially in California—has changed significantly in recent years.
Rising home prices, high mortgage rates, natural disasters, and insurance challenges have made the decision to buy or rent more complex than ever. Real estate investor and author Grant Cardone warns that homeownership in Southern California can be a financial burden rather than a smart investment.
“In today’s market, buying a home in Southern California is a financial trap for most people,” Cardone says. “Homeownership comes with high costs, and in California, those expenses keep increasing.”
Cardone explains that many buyers underestimate the financial responsibilities of homeownership. Property taxes, maintenance costs, insurance premiums, and the risk of damage from natural disasters can make owning a home more expensive than expected. While many assume their property will gain value over time, Cardone cautions that appreciation is never guaranteed, while the costs of ownership are unavoidable.
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Housing affordability has become a significant challenge, largely due to high mortgage rates. The average 30-year fixed-rate mortgage has remained near 7% for the past two years, the highest level in two decades, according to Freddie Mac. Hopes that interest rates would decline following Federal Reserve rate cuts last year have faded, making home loans more expensive than they have been in a generation.
For those unable to buy, renting isn’t necessarily an easier alternative. California’s rental market remains tight, with demand outpacing supply. Zillow reports that as of February 3, 2025, the average rent across all apartment sizes in California was $2,763 per month.
“Finding affordable housing in Southern California is difficult right now,” says KTLA consumer reporter David Lazarus. “Home prices and mortgage rates are still high, and rental prices continue to rise despite efforts to control them.”
The traditional idea that homeownership is always a better financial move than renting is being challenged. Many financial experts agree that buying a home is only a good decision if the buyer plans to stay in the property long-term. Otherwise, the money spent on a down payment and other costs might be better invested elsewhere.
“Buying a home can be a good investment, but renting often makes more sense for those who want financial flexibility, mobility, and fewer maintenance responsibilities,” says Merrick Lackner, CEO of rental platform Rently.
Mortgage lender and author Jennifer Beeston provides some key considerations for deciding whether to buy or rent:
When Buying Makes Sense:
- You plan to stay in the home for at least three years, whether as a primary residence or an investment property.
- You are thinking long-term, as homeownership historically yields the best financial returns over extended periods.
- You have children and want to provide stability in a specific school district.
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When Renting Makes Sense:
- You are unsure about a location and want to test it before making a long-term commitment.
- Your job requires frequent relocation, making homeownership impractical.
- You prefer not to deal with home maintenance and repair costs.
Another factor to consider is whether to buy a condominium or a single-family home. While condos are often more affordable, Beeston warns that they come with unique challenges.
“Single-family homes generally appreciate at higher rates and have more predictable costs,” Beeston explains. “Condos, on the other hand, come with homeowners’ associations (HOAs) that determine maintenance, fees, and rule changes. When you buy a condo, you’re essentially handing control of your financial decisions to an HOA.”
Ultimately, the decision to buy or rent depends on individual financial goals and lifestyle preferences. With current market conditions, prospective buyers and renters must weigh the costs, risks, and benefits carefully before making a move .
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