Oriana Suarez May 2, 2024
Buyers
Thinking about buying a home? While today’s mortgage rates might seem a bit intimidating, here are two solid reasons why, if you’re ready and able, it could still be a smart move to get your own place.
There’s been some confusion over the past year or so about which way home prices are headed. Make no mistake, nationally they’re still going up. In fact, over the long term, home prices almost always go up (see graph below):
Using data from the Federal Reserve (the Fed), you can see the overall trend is home prices have climbed steadily for the past 60 years. There was an exception during the 2008 housing crash when prices didn't follow the normal pattern, but generally, home values kept rising.
This is a big reason why buying a home can be better than renting. As prices go up and you pay down your mortgage, you build equity. Over time, this growing equity can really increase your net worth. The Urban Institute says:
“Homeownership is critical for wealth building and financial stability.”
Here’s another reason you may want to think about buying a home instead of renting – rent just keeps going up over the years. Sure, it might be cheaper to rent right now in some areas, but every time you renew your lease or sign a new one, you’re likely to feel the squeeze of your rent getting higher. According to data from iProperty Management, rent has been going up pretty consistently for the last 60 years, too (see graph below):
So how do you escape the cycle of rising rents? Buying a home with a fixed-rate mortgage helps you stabilize your housing costs and say goodbye to those annoying rent increases. That kind of stability is a big deal.
Your housing payments are like an investment, and you've got a decision to make. Do you want to invest in yourself or keep paying your landlord?
When you own your home, you're investing in your future. And even when renting is cheaper, that money you pay every month is gone for good.
As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), says:
“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.”
Certainly! Here's how you can incorporate this information into a section of your blog:
When considering whether to rent or buy a home, understanding the financial implications is crucial. Let's take a closer look at the comparative costs:
1. Annual Rent in New York City:
The median annual rent for a one-bedroom apartment in New York City ranges from approximately $48,000 to $60,0000, depending on factors like neighborhood and specific location within the city. For example, in Manhattan, the average rent rose to a record $5,000 per month in 2022.
2. Annual Mortgage Payments in New Jersey:
For those considering homeownership in New Jersey the median monthly home payment is $2,553, but let's break down the numbers. Assuming a median-priced home, a 20% down payment, and a 30-year fixed-rate mortgage with a 3% interest rate, the annual mortgage payments would be around $20,000 to $30,000. Again these figures vary based on factors such as property taxes, insurance costs, and prevailing interest rates.
The decision between buying and renting boils down to long-term financial stability and investment in your future. While renting may seem cheaper in the short term, homeownership offers the promise of equity accumulation and freedom from the perpetual cycle of rent hikes. As you weigh your options, consider the enduring benefits of owning your own home and how it aligns with your financial goals.
Ready to leap into homeownership? Tired of your rent going up? It's time to explore the many benefits of homeownership, let’s talk to explore your options.
Stay up to date on the latest real estate trends.
October 1, 2024
Nearly 80% of first-time homebuyers qualify for down payment assistance, but only 13% actually utilize it. Don’t miss out! Learn about down payment options, grants, an… Read more
September 29, 2024
With nearly half of all homebuyers starting their search online, your listings need to stand out. Learn how to enhance your online presence with professional photos, v… Read more
September 16, 2024
Worried about selling your home during an election year? Historical data shows that Presidential elections have a minimal, temporary impact on the housing market. Disc… Read more
September 1, 2024
This blog offers practical advice on how to find a great local agent, including tips on checking their reputation, ensuring they have local market expertise, evaluatin… Read more
August 30, 2024
As the real estate landscape undergoes significant changes in 2024, it's crucial for professionals to stay informed and prepared.
August 16, 2024
Key considerations include the suitability of your property for rental, your readiness to manage tenants, and the costs associated with being a landlord. Explore these… Read more
August 2, 2024
In today's housing market, newly built homes may offer more budget-friendly options than many buyers expect. Contrary to common belief, the median sales price for newl… Read more
July 26, 2024
Starting August 17, 2024, MLS Participants must have a written agreement with buyers before home tours. This guide covers mandatory provisions and additional considera… Read more
July 15, 2024
Over the past year, homeowners have seen significant equity gains due to rising home prices. According to CoreLogic, the average homeowner's equity has increased by $2… Read more
We strive to become your go-to Real Estate Advisors. Book a free consultation today and let’s get started with a buying or selling plan for your home customized to your unique timeline.