Wondering whether to keep renting or take the leap into homeownership? It’s a big decision, and renting can feel easier, especially if buying a home feels out of reach. However, a Bank of America report shows that 70% of renters fear the long-term consequences of renting, such as not building equity and dealing with rising rents.
Buying a home has powerful financial benefits if you're able to make it work. Homeownership can help build wealth over time. According to data from the Census and HUD, home prices typically rise, which means homeowners build equity as they pay down their mortgage and their home’s value appreciates. The average home sale price in 1988 was just shy of $150,000 where today that is around $500,000. With this increase in net worth it’s no wonder 79% of buyers believe owning a home is a good financial investment, according to the National Association of Realtors (NAR).
While renting might seem more affordable in the short term, rents tend to rise over time. Census data shows rents have been increasing for decades. What may have cost you $350 for rent in 1988 costs exponentially more at $1,500 in today’s world. This means that each time you renew or sign a new lease, your costs likely go up — without any equity being built in return. Rising rent costs may also make it harder to save for a future home purchase.
The long-term impact of renting versus buying is clear: when you own a home, your monthly payments build equity and help grow your wealth. Renting, on the other hand, means your payments help your landlord build equity, not you.
Renting works for those who aren’t ready or able to buy today, but if you're able to make it work financially, homeownership offers long-term financial success. While renting might seem easier, it doesn’t provide the same benefits as owning a home.
Bottom line: If you can afford it, buying a home is an investment in your future and worth considering for long-term financial growth. Contact me today and let’s discuss your moving plans!
