Are you considering buying your first home? If so, it can be helpful to know what led other people to make that decision. According to a recent survey of first-time homebuyers by
Pulte Group:
“When asked why they purchased their first home recently, the answer was simple: because they wanted to. Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.”
While that survey looked specifically at first-time homebuyers buying newly built homes, the same sentiment is true for just about anyone buying their first home. Here’s a bit more information to help you think about those two benefits of homeownership to see if they’re a key factor for you too.
When You Buy a Home, You Have More Stability than When You Rent
You might want to stop renting because rents keep going up. If you’re a renter, that means there’s a chance your payment will increase each time you sign a new rental agreement or renew your current one. Here is how the median asking rent has increased since 1988 in the chart below.
On the other hand, when you buy your home with a fixed-rate mortgage, your monthly housing payment is predictable over the length of that loan - possibly up to 30 years! This stability can give you a peace of mind that renting just can’t provide. Jeff Ostrowski, real estate journalist, breaks it down:
“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”
When You Buy a Home, You Grow Your Wealth as Home Values Climb
Beyond that, owning a home can also be a great long-term investment. While renting may be the more affordable option right now, it doesn’t provide an avenue for you to grow your wealth over time.
Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value appreciates. That’s a significant perk you can’t get if you keep renting.
When you take both of these factors into account, it may make better financial sense to buy. Most experts project home prices will continue to appreciate over the next few years at a pace that’s more normal for the market. That means when you buy a home, not only are you investing in a place to live, but you’re also investing in your financial future.
If you’re ready to purchase your first home, contact us today at 704-659-5056 or visit us online at HudsonAdvantageRealty.com
