With skyrocketing housing prices, homeownership may be out of reach for many Americans.

Yet rents are also rising. So how do you know if you should own a home or rent? It depends on a number of factors, experts said.

“If you’re not sure whether or not you want to rent or buy right now … it’s better to make your decision based on your personal situation and your personal needs,” said Lexie Holbert, housing and lifestyle expert for Realtor.com.

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Home prices jumped 19.2% year over year in January, according to the S&P CoreLogic Case-Shiller Index. Meanwhile, single-family rental homes gained a record 12.6% in January from 12 months prior, according to CoreLogic.

On top of rising prices, mortgage interest rates are also soaring, hitting their highest level in more than three years last week.

When it comes down to the numbers, it’s generally more affordable to own a home, but the gap in affordability is shrinking as interest rates rise, according to ATTOM, a real estate data tracker. Owning the median-priced home is more affordable than the average rent on a three-bedroom home in 58% of the country, ATTOM reported in January.

To be sure, affordability is an issue for many. Fully 64% of non-homeowners said it’s holding them back from owning a home, including 43% who believe their income levels are not high enough, a Bankrate survey found. High home prices and the inability to swing a down payment and/or closing costs were also constraining buyers.

Here’s what to consider when making a decision whether to own a home or rent.

Before you consider buying, think about where you are in your life. Are you looking to settle down somewhere for a while or will you be moving in a couple of years?

The general rule of thumb is it takes about five years to seven years in a home to recoup the purchase costs, Holbert said. That includes closing costs, which add between 2% and 5% to the purchase price.

“If your home needs are going to be pretty consistent and pretty stable over the next few years, now may be a really good time to buy for you,” she said.

“If they’re changing, you may want to consider renting so that you have the flexibility to move.”

Ask yourself if you are financially ready to own a home. That includes having enough emergency savings in case something happens in your first year of homeownership, Holbert said. You should also have enough monthly income to afford the mortgage payment, taxes and insurance, as well as extra monthly expenses like utilities.

Check your credit report, as well, since your credit score has a direct bearing on the mortgage you’ll get and interest rate you may pay. If you see any mistakes, get them corrected before you apply for a loan.

If you can’t afford the monthly payments, continue to rent and keep saving money if home ownership is your ultimate goal, Holbert said. If high rent prohibits you from saving, consider downsizing or making other big lifestyle changes so you can start putting more money aside.

“You’ll read that if you cut back on your $4 latte habit, it could really help you save for a home,” she noted.

“While it’s really good to save, where you’re really going to find that big cash for that down payment is going to be in those big spending categories, like housing or your car.”

Figuring out what you can afford if you were to purchase a home is especially important now as home prices are rising, Greg McBride, chief financial analyst at Bankrate.

This way, you have boundaries set around your home shopping.

“The position you won’t want to be in is falling in love with a home and getting your offer accepted and then having to figure out how to pay for it,” he said.

Check out homes in your price range on sites like Realtor.com or Zillow to determine if they fit your needs.

You can also use online calculators to help you make a financial determination between renting and buying, including those from SmartAsset, NerdWallet or Realtor.com.

Also, keep an eye on rising mortgage rates, Holbert warned. The Federal Reserve has indicated it will increase interest rates six more times this year, which, in turn, impacts mortgage rates. That’s why, if you are currently in the market to buy a home, it may be better to do so now before rates and prices climb higher, she said.

Just don’t get caught up in FOMO — or the fear of missing out. That could lead you to regret your purchase and put you in a financial bind down the road, McBride said.

“The novelty of that house will wear off; the mortgage payments will not,” he said.

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