Get to Know the Benefits of Home Ownership
Life Comes at You Fast
Realtors have been beating the drum for home ownership since the beginning of the industry. Owning one's own home is a part of the "American Dream", yet lately shopping for a home can seem like a bad dream. Though, with the right guidance, you can make real estate work for you.
With insurance and interest rates alarmingly high, many potential buyers have decided to wait it out. But what if waiting it out isn't the right strategy for you? Perhaps you recently accepted a new position in a different geographical location. Maybe you've just combined a household with a significant other or downsized due to a change in marital status. Is your landlord raising your rent? (Many are; see graphic below) Life changes happen, and with them comes a need for a different living situation.
Home Appreciation
If we take a look at trends in home pricing for single-family units from our local MLS, we can see that over the last ten years, the median price per square foot has climbed steadily over time. Essentially, as long as there is not a quick turnaround from when you purchased the property from when you sold it, there should be an appreciation in value.
These trends aren't just local. The FHFA puts out reports for the Monthy House Price Index. Here we can see the trends in home prices. Since 1991, homes have seen a Compound Annual Growth Rate of 4.4%. Not planning on living in a home that long? The Compound Annual Growth Rate since January 2012 has been 7.5%.
Building Equity
Have you ever heard the saying that if you're renting, you're just paying someone else's mortgage? There's so much truth in that statement. As previously shown, rents have been going up to keep pace with home prices and other costs. Home Ownership gives people a chance for those monthly living costs to build equity. If we look at the chart below, we can see the percentage of homeowners that have 30% or more in home equity. We can see where many people took advantage of low-interest rates during the pandemic to purchase and refinance in order to build equity.
