The Benefits of Buying Over Renting
Wondering if now is your time to buy a home and say goodbye to renting? Despite the current mortgage rates, buying a home could be a smart move if you’re financially prepared. Here are a couple of compelling reasons to consider buying instead of renting.
Home Values Increase Over Time
There’s been a bit of uncertainty recently about the direction of home prices. However, it’s clear from a broader perspective that nationally, home values are on an upward trajectory. Historical data from the Federal Reserve shows that, except for a few anomalies like the 2008 financial crisis, home prices have consistently risen over the past six decades.
Across Colorado, we’ve seen cities even double in home value in fewer than ten years! We understand not everyone will live in a home for ten years, but homeownership is a great way to build wealth unlike anything else. As you pay down your mortgage and property values increase, you accumulate home equity—a key component of personal wealth.
Take a look at how quickly these Colorado cities’ average home values doubled:
- Arvada: $325,500 to $656,000 in 8 years, 1 month
- Thornton: $273,100 to $557,000 in 8 years, 2 months
- Aurora: $235,000 to $475,000 in 8 years, 10 months
- Colorado Springs: $224,127 to $449,123 in 8 years, 11 months
- Westminster: $255,000 to $515,000 in 8 years, 11 months
- Lakewood: $265,450 to $537,250 in 9 years
- Fort Collins: $273,100 to $560,000 in 9 years, 1 month
- Denver: $280,000 to $535,000 in 9 years, 3 months
- Boulder: $460,750 to $930,000 in 9 years, 5 months
Rent Continues to Rise Year After Year
Another solid reason to buy rather than rent is the relentless increase in rental costs. While renting might initially seem more affordable in some areas, each lease renewal often comes with a price hike. Data from iProperty Management reveals that, like home prices, rent has also been climbing steadily for the last 60 years.
So, how can you break free from the endless cycle of rent increases? Locking in a fixed-rate mortgage when you buy a home is an effective way to stabilize your housing expenses. This stability is more than just financial—it’s about peace of mind.
Paying rent is an expense with no return on investment. In contrast, each mortgage payment builds your equity, effectively investing in your future. Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), puts it well:
“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.”
Nonfinancial Benefits to Buying
While there are clear financial benefits to becoming a homeowner, let’s go over other great benefits of owning a home.
Stability and Security: Owning a home provides a sense of permanence and security that renting doesn’t have. Homeowners don’t have to worry about being asked to move due to lease terms ending or landlords deciding to sell the property.- Freedom to Personalize: Homeowners have the freedom to decorate, renovate, and modify their homes to suit their tastes and needs without needing permission from a landlord. This ability to personalize your space can significantly enhance your comfort and enjoyment of your own space.
- Community Involvement: Homeowners often have a stronger connection to their communities. Owning a home can lead to longer-term residency, which fosters deeper relationships with neighbors and greater involvement in local activities.
- Pet Ownership: Homeowners are more likely to have the freedom to own pets without restrictions commonly imposed by rental agreements, such as size, type, and the number of pets.
- Sense of Belonging: There’s a strong sense of pride and belonging that comes with owning a home. It can contribute to personal satisfaction and emotional well-being, knowing it’s a space that’s truly yours.
What’s Best for You?
Fed up with unpredictable rent increases? If you’re ready to take control of your housing costs and enjoy the benefits of homeownership, let’s discuss how you can take this next step. Join the many who are choosing to invest in their future by buying a home!
