Considering purchasing a home? Despite the current mortgage rates appearing daunting, if you're prepared and capable, it is still a wise decision to invest in your own property. Here are two compelling reasons why:
1. Home Values Typically Go Up Over Time
There has been some uncertainty over the past year regarding the direction of home prices. However, it's important to note that nationally, they are still on the rise. In fact, over the long term, home prices almost always trend upwards (refer to the graph below).
By utilizing data from the Federal Reserve (the Fed), it is evident that the overall trend shows a steady climb in home prices over the past 60 years. While there was an exception during the 2008 housing crash when prices didn't follow the normal pattern, in general, home values have continued to rise.
This is a significant factor that highlights why buying a home can be more advantageous than renting. As home prices increase and you pay off your mortgage, you are building equity. Over time, this growing equity can substantially enhance your net worth. The Urban Institute affirms this perspective.
“Homeownership is critical for wealth building and financial stability.”
2. Rent Keeps Rising in the Long Run
Here's another compelling reason to consider buying a home instead of renting – rent tends to increase over the years. While it may be more affordable to rent in certain areas at the moment, each time you renew your lease or sign a new one, you're likely to experience the pressure of rising rent costs. Data from iProperty Management shows that rent has consistently increased over the last 60 years as well (refer to the graph below).
Looking to break free from the cycle of rising rents? Purchasing a home with a fixed-rate mortgage allows you to stabilize your housing costs and bid farewell to the frustration of escalating rent. This level of stability can make a significant impact on your financial well-being.
Your housing payments represent an investment, presenting you with a crucial decision. Will you choose to invest in yourself or continue paying your landlord’s mortgage?
By owning your home, you are investing in your own future. Even when renting seems more cost-effective, the money you pay every month is essentially gone for good.
According to Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR),
“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”
Bottom Line
If you're tired of your rent going up and want to explore the many benefits of homeownership, connect with us to explore your options.
For more info and to schedule a meeting, email us at [email protected]
