Are you thinking about whether it's a good time to buy a house right now? While today's mortgage rates might look a bit scary, here are two solid reasons why it might still be a good time to become a homeowner.
1. Homes Generally Gain Value Over Time
There's been some confusion about what's been happening with home prices over the past couple of years. Although they dipped slightly in late 2022, this year they've been going up at a more usual rate, which is good news for the housing market. While it's easy to worry when you look at prices over just a year or two, history shows that in the long run, home values tend to go up (see the chart below).
If you look at data from the Federal Reserve over the past 60 years, you can see that, in general, home prices have gone up consistently. There was a hiccup during the housing crash of 2008 that caused prices to drop for a while, but overall, home values have gone up.
One good reason to consider buying instead of renting is that as home prices rise and you pay off your mortgage, you build equity. Over time, this growing equity boosts your overall net worth.
2. Rent Keeps Increasing Over the Years
Another reason to think about buying a home instead of renting is the constant rent hikes. If you've ever felt the pinch of your rent going up year after year, you're not alone. That's because rents have been rising steadily over the past six decades (see the chart below).
When you buy a home, you can lock in your monthly housing costs and say goodbye to those pesky rent increases. This stability can make a big difference in your financial planning.
In the end, it comes down to a simple choice: Do you want to invest in yourself or your landlord?
By becoming a homeowner, you're investing in your own future. When you rent, that's money you never get back.
Considering the consistent rise in home values and the chance to avoid never-ending rent increases, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), says: "If a person is financially stable, can manage monthly mortgage costs, and can handle household maintenance expenses, then buying a home makes sense."
Bottom Line
When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to steer clear of rising rents and take advantage of long-term home price appreciation, reach out to us to explore your options! With our 30+ years of experience on the SF Peninsula, knowledge of micro-neighborhoods and our expert negotiation skills, we will be there every step of the way to make the process stress-free and seamless.
Graphs courtesy of Keeping Current Matters
