Invest in Yourself by Owning a Home
Are you considering the idea of owning a home in Naperville or the Chicago suburbs? Perhaps you're hesitant due to the current mortgage rates, but there are two compelling reasons why now might be the right time to invest in homeownership.
Home Values Appreciate over Time
Home prices can sometimes seem unpredictable, leading to confusion about their trajectory. While there was a slight dip in late 2022, this year has seen a more stable appreciation in home values. In the short term, it's easy to worry about price fluctuations, but a look at the long-term trend reveals that home values tend to rise steadily (see the graph below):
Based on data from the Federal Reserve spanning the past 60 years, it's clear that the overall trend is one of consistent home price growth. While there was a brief exception during the housing crash of 2008, home values have generally been on an upward trajectory.
This consistent appreciation in home values is a compelling reason to consider buying a home. As home prices increase, and as you make mortgage payments, you're building equity in your property. Over time, this growing equity contributes to your overall net worth.
Rent Keeps Going Up Through the Years
If you've ever rented a property, you're likely familiar with the frustration of annual rent increases. Rental rates have steadily climbed over the past six decades (see the graph below):
By choosing to become a homeowner, you can put an end to the endless cycle of rent hikes.
In essence, your housing payments represent an investment, and it's up to you to decide who you want to invest in—yourself or your landlord. Homeownership allows you to invest in your own future, whereas renting often means your hard-earned money is lost forever.
With the consistent rise in home values and the opportunity to escape the burden of ever-increasing rent, owning a home can pave the way for financial security. Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), emphasizes the importance of a well-managed budget and responsible homeownership:
"If a homebuyer is financially stable, able to manage monthly mortgage costs, and can handle the associated household maintenance expenses, then it makes sense to purchase a home."
When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, let’s connect to go over your options.
Call Teresa Ryan today, at 630-276-7575 for expert advice and guidance when you buy your first home in the Chicago suburbs!