Nicole Rueth, Producing Branch Manager for The Rueth Team - Fairway Independent Mortgage
On average, more than 40 million people move each year in the United States. An overwhelming majority of those moves occur between April and September during the peak moving season – and even more so in August as parents rush to get the move completed before school starts back up.
Many rental properties have lease terms that expire in the summer months, too, presenting those considering buying a home with a big decision to make in peak lease-renewal and moving season: continue to rent or take the big step up to homeownership?
Interest rates remain low and home prices have stagnated, seemingly indicative of a relatively cooling market. Or is it? While refinancing applications have increased, the fluid nature of the market leaves many hesitant to make the move to homeownership. Renters contemplating “I’ll just wait a little bit longer,” or “Let’s just see how low these rates will go” risk waiting too long, so long that rates begin to rise, swinging opposite of consumers’ favor.
If you’re one of the many considering transitioning from renting to homeownership this summer or fall, let some of these benefits of homeownership factor into your decision.
Home Ownership Is a Built-In Savings Account
Owning a home is an investment in yourself and your financial security. Think about it. As a renter, you’re just paying someone else to live in a place temporarily – a place that will never be your own, no less. When you buy a home, you enroll in a forced savings plan. No matter how tight your budget may be, you find the money to make your monthly mortgage payment and, therefore, gain equity over the lifetime of ownership in order to build wealth.
Owning a Home is the No. 1 Way Most Americans Build Wealth
According to the Urban Institute, the average net worth of a homeowner is much larger than that of a renter. In 2016, the average homeowner's net worth was $231,420; whereas the average net worth of a renter was only $5,200. Between saving money and the equity you gain in a home, owning is one of the primary ways to build wealth.
Sense of Security and Peace of Mind
In many trendy neighborhoods, rents are starting to go through the roof and people that have lived there for years are being forced out as they can no longer afford to live there. That won’t happen when you own a house if you have a fixed-rate mortgage, giving you peace of mind and a sense of security in buying your own place.
Buying a Home Has Tax Advantages
The long-term tax benefits of buying rather than renting may be reason enough to invest. Although the primary home tax benefits have waned, we all know presidents change and tax laws follow suit. Homeownership is a long-term investment, so those advantages have a high probability of coming back. Alternatively, if down the road you want to convert a primary home to a rental property, that’s where the significant tax benefits come into play.
More Creative Freedom
As a homeowner, you get to choose the aesthetic look and feel of your home. Say goodbye to worrying about if you’ll get a security deposit back on a leased home when you move out. Farewell to wondering how and when you’ll fix the wear and tear in your rental once your lease expires. You have the creative freedom to design the home you want without violating any rules – including knocking out walls, renovating bathrooms and replacing or building that deck in the backyard you’ve always wanted.
Sense of Belonging and Community
As homeowners tend to stay in their homes for longer than renters, they’re more likely to put down roots in their communities. This manifests in many ways such as joining a local neighborhood association or school group, sponsoring block parties or even just getting to know your neighbors on a first name basis – something many renters don’t have the luxury to do.
Of course, for those that aren’t looking for a long-term commitment and are more focused on flexibility, amenities and not worrying about maintenance costs, renting may still be the best option until you’re ready to own your own place.
If your main concern in the great debate of buying versus renting is affordability, you might be surprised at what options are available to you. Maybe you aren’t in a position to begin shopping for a home or apply for a mortgage right now, but there are always steps you can take to proactively prepare your finances for homeownership in the future.
Whatever the case may be, if you’re looking to get out of your current lease and into a home, The Rueth Team is here to assist you in understanding options to achieve your goals for homeownership. Don’t hesitate to reach out today!