Are you contemplating the right time to buy a home? While today's mortgage rates may appear daunting, two compelling reasons suggest that it might still be an opportune moment to embrace homeownership.
1. Home Values Appreciate over Time
Over the past two years, there has been some uncertainty regarding home prices. Although they experienced a slight dip in late 2022, this year, they have been appreciating at a more consistent pace, which bodes well for the housing market. While short-term fluctuations might lead to concerns about unpredictability, historical data spanning 60 years reveals a steady upward trajectory in home prices (refer to the graph below).
Although there was an exception during the housing crash of 2008, causing a temporary deviation from the norm, home values have shown a consistent upward trend.
The increasing value of homes presents a compelling argument for buying instead of renting. As prices rise and you steadily pay down your mortgage, you are building equity. Over time, this growing equity significantly boosts your net worth.
2. Rent Keeps Going Up Through the Years
Another compelling reason to consider homeownership over renting is the perpetual increase in rent. If you've experienced the frustration of yearly rent hikes, you're not alone. Over the past six decades, rents have consistently risen (as illustrated in the graph below).
Choosing homeownership allows you to lock in your monthly housing costs and bid farewell to the endless cycle of rent increases. This stability can be a game-changer for your financial situation.
Ultimately, it comes down to a simple choice: you can invest in yourself or continue to contribute to your landlord's wealth. By becoming a homeowner, you are making a long-term investment in your future. When you rent, that money is essentially gone, with no return on investment.
Considering the consistent rise in home values and the opportunity to escape perpetual rent hikes, homeownership emerges as a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), emphasizes, "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."
In conclusion, buying a home offers numerous advantages over renting, even in a climate of higher mortgage rates. If you wish to avoid the uncertainty of rising rents and tap into the potential for long-term home price appreciation, I encourage you to connect with us. Let's explore your options and help you make a sound investment in your future.
