The Perks of Buying over Renting

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Thinking about buying a house? While today's mortgage rates may appear intimidating, here are two compelling reasons why, if you're ready and able, buying your own home could still be a wise decision.

1. Home values typically increase over time.

Over the last year, there has been some uncertainty about the direction of home prices. Make no mistake, they are still increasing on a national scale. In fact, over time, home prices almost always rise (see graph below):
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Using data from the Federal Reserve (the Fed), you can see that home prices have steadily increased over the last 60 years. There was an exception during the 2008 housing crash when prices did not follow the usual pattern, but overall, home values continued to rise.

This is a major reason why purchasing a home can be more advantageous than renting. As prices rise and you pay down your mortgage, you gain equity. Over time, this growing equity can significantly boost your net worth. The Urban Institute states:

“Homeownership is critical for wealth building and financial stability.”

2. Rent keeps rising in the long run.

Another reason you should consider buying a home rather than renting is that rent prices continue to rise over time. Sure, renting may be less expensive in some areas right now, but every time you renew or sign a new lease, you're likely to feel the squeeze of rising rents. According to data from iProperty Management, rent has also been steadily increasing over the last 60 years (see graph below).

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So, how can you break the cycle of rising rents? Purchasing a home with a fixed-rate mortgage allows you to control your housing costs and say goodbye to those pesky rent increases. That level of stability is significant.

Your housing payments are like an investment, and you have a choice to make. Do you want to invest in yourself or continue paying your landlord?

Owning a home is an investment in your own future. And even if renting is less expensive, the money you pay each month is gone forever.

Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), states:

“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 fed up with rising rents and want to learn more about the many advantages of homeownership, let's talk about your options. 

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