Invest in Yourself by Owning a Home
Are you contemplating the idea of purchasing a home at a time when mortgage rates might seem daunting? Here are two compelling reasons why now could be the perfect moment to take the leap into homeownership, all while securing your financial future.
1. Home Values Appreciate Over Time
There has been some uncertainty regarding recent home price trends, with a slight dip in late 2022. However, this year has seen a more stable and steady appreciation in home values, which bodes well for the housing market. Short-term fluctuations may raise concerns, but history reassures us that, in the long run, home values consistently rise (as depicted in the graph below).
Drawing on data from the Federal Reserve spanning the past six decades, it's evident that the overall trajectory of home prices has been a steady upward climb. Although there was a temporary deviation during the housing crisis of 2008, where prices defied the typical pattern, home values have generally shown a consistent upward trajectory.
Increasing home values present a compelling case for homeownership over renting. As property prices increase, and as you steadily pay down your mortgage, your equity grows. Over time, this burgeoning equity not only strengthens your financial position but also bolsters your net worth.
2. Rental Rates Keep Climbing
Another noteworthy reason to contemplate homeownership over renting is the perpetual escalation of rental costs. If you've experienced the burden of enduring annual rent hikes, you're far from alone. Over the past sixty years, rents have consistently risen, as depicted in the graph below.
By becoming a homeowner, you can stabilize your monthly housing expenses and bid adieu to those relentless rent increases. This newfound financial stability can be truly transformative.
In essence, your housing payments should be regarded as an investment, and a choice must be made. Are you inclined to invest in yourself, or in your landlord's future?
Choosing homeownership is an investment in your own financial well-being. When you rent, the money you spend is money you'll never see again.
When you factor in the consistent appreciation of home values and the opportunity to break free from relentless rent hikes, homeownership emerges as a pathway to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), aptly points out:
"If a homebuyer is financially stable, capable of managing monthly mortgage expenses, and can handle household maintenance costs, then it makes perfect sense to invest in a home."
In essence, purchasing a home offers a multitude of benefits over renting, even in the face of high mortgage rates. If you aspire to evade the constant specter of rising rents and seize the opportunity for long-term home price appreciation, your best step is to reach out to a local real estate agent who can walk you through your options.