Reasons Why Homeownership Is The Long Term Answer

These days we are often seeing headlines surrounding higher mortgage rates, inflation challenges and the concern about a potential recession. All of this is building which has many people wondering if they should consider buying a home now or hold off until later on. While these concerns may be valid nowadays it is important for one to think about the long-term benefits of homeownership.

To put it in perspective, most homeowners that purchased a property 5, 10 or 25 years ago would most likely not regret their decision. The reason being is that home values grow with time and in turn so does your wealth. In fact, according to a recent release by Fannie Mae, 70% of respondents stated that they believe buying a home is a safe investment. 

Across the country home prices have risen quite a bit with some varying degree per region. According to data from the Federal Housing Finance Agency (FHFA) the national average of home price gains was just over 56% over the past five years. Another study from FHFA shows a 30 year time span with a national average of 290% increase in home prices. This means the average homeowner who bought a house 30 years ago saw their home almost triple in value over that time frame. That’s the main reason that so many homeowners who bought their homes years ago are still happy with their decision.

More recently you may have noticed chatter during the latter portion of last year that home prices would crash, but that didn’t transpire. Even though home prices have leveled somewhat from the record peak we saw during the last few years, home prices are already starting to climb again in several areas today. This means that in a lot of markets home prices should start to grow in value over the next year.

Finally, the alternative to buying a home would be renting one and rental prices have been increasing for many years now too. So why rent and accept annual lease increases for no long-term financial benefit? One thing is for certain is if you are renting there will be no gain in equity for yourself where history proves that there is a long term with a property purchase.