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 PulteGroup:
“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.”
Certainly, the sentiment from the survey of first-time homebuyers buying newly built homes can generally apply to most individuals purchasing their first homes. Understanding the benefits of homeownership can significantly impact your decision-making process. If you would like more detailed information or specific insights into the advantages of owning a home, please feel free to ask. I’m here to help with any further questions or concerns you may have.
When You Buy a Home, You Have More Stability than When You Rent
Rising rental costs can pose a significant concern for renters. Each time a new rental agreement is signed or an existing one is renewed, there is a possibility of an increase in rental payments. This uncertainty in housing expenses can often prompt individuals to consider purchasing their own home, where they can enjoy the stability of a fixed-rate mortgage and predictable monthly payments. If you’re exploring options to mitigate this issue, purchasing a home might indeed be a suitable solution.
Certainly, opting for a fixed-rate mortgage when purchasing a home offers the advantage of predictability and stability in your monthly housing payments throughout the loan’s duration. This stability provides a peace of mind that renting often cannot offer, as rental costs may fluctuate unpredictably over time. With a fixed-rate mortgage, you can effectively plan your long-term finances and budget more accurately, fostering a sense of security and financial control. If you’re considering the predictability and peace of mind that comes with homeownership, exploring your options for a fixed-rate mortgage could be a prudent step. 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. Mark Fleming, Chief Economist at First American, explains that’s an important distinction to consider:
“Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.”
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 that 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 feel prepared and financially equipped, purchasing your first home can indeed be a wise decision, especially when considering the potential benefits of stabilizing your housing payments and building equity over time. It’s essential to assess your current financial situation and explore available options to determine the best course of action for your specific circumstances. If you’d like further guidance or information on the home-buying process, connecting with a trusted real estate professional can provide valuable insights and assistance as you embark on this important journey towards securing your financial future.