Low interest rates and rising rental prices are making many people consider buying a home. But in today’s fast-paced seller’s market, starting the buying process can seem overwhelming.
It is true that there are some barriers to home ownership, such as saving enough for a down payment, finding the right home in this low-inventory market, and competing with multiple offers. But ask any owner and you’ll likely find that the rewards outweigh any potential headaches.
To help you decide if owning a home is right for you, here are some of the many benefits to consider.
Homeowners have the luxury of predictable monthly payments. And the way rental rates have skyrocketed, that can be a big plus. According to Apartment Guide’s May 2021 rental report, the average rental price in Michigan was $ 1,297 last year. This year, that increased 21.28% to $ 1,573. As a homeowner, you don’t have to worry about sudden price increases – you can lock in a mortgage payment for 30 years.
âSometimes buyers are surprised that they can go from a 2-bedroom apartment to a 3-bedroom starter house with a yard and pay less per month than they did when renting,â said Coldwell Banker Hubbell BriarWood real estate agent Amy Jackson. âThere are upfront costs when buying a home, but over the long term, all of that money goes to your investment, not your owner’s. ”
As you pay off your mortgage each month, you also build up equity. And, as home prices rise, your equity will increase as your home’s value increases. By creating equity, you are essentially creating a long-term savings account. How? ‘Or’ What? Because there are a number of ways you can tap into that equity down the road, which can come in handy if you are suddenly faced with a large and unexpected expense, want to make improvements to your home, or have a major event in your life. your life.
âAnd as the value of your property increases and your equity increases, you may be able to sell and make a profit down the road,â Jackson said. âI had a client who bought a house 5 years ago, made a few updates during that time and sold it this year, making a profit of $ 100,000. With the current state of the market, those who bought a year or two ago are already seeing a sharp increase in the value of their property.
Predictable payments, growth in equity, and long-term savings are why homeownership is a major catalyst for wealth creation for many American households. In fact, Federal Reserve data indicates that a homeowner’s equity is over 40 times that of a tenant.
On top of all of this, there are also tax benefits when you own a home. Not only is your mortgage interest tax deductible, property tax deductions may also be available.
According to a 2017 report by the National Association of REALTORSÂ® (NAR), âThe extent of community participation and the resulting benefits to society are difficult to measure, but several researchers have found that owners tend to be more involved in their communities than tenants.
One reason could be that landlords move much less often than tenants and are integrated into the same neighborhood and community for a longer period. The NAR report found that âwhile 5% of owner-occupied residents moved between 2014 and 2015, almost 25% of tenants changed their place of residence. And because homeowners often have closer ties to the community, they are more likely to participate in local elections and civic and neighborhood groups.
âAnd research has shown that when people are invested in their community and engaged with their neighbors, the crime rate also tends to be lower,â Jackson said.
The NAR report found that owning a home also has health benefits, concluding that âthe wealth-creating effect of ownership and the sense of control it gives homeowners in a stable housing market affects the owners’ mental and physical health in a positive way â.
As a tenant, you have rules about what changes you can make to a property. Even if you are allowed to make improvements or updates, it does not make financial sense as it is the owner who ultimately benefits. But once you own it, you can customize your home however you want. Want to paint every room in the house? Sure! Want to change the kitchen counters? Dark!
Jackson says the greatest personal benefit of home ownership is the sense of accomplishment that comes with making what has long been known as the American Dream.
âThere is a sense of pride when you have a home that is truly yours, a place where you can meet with friends and family, a place where you feel comfortable and safe,â he said. she declared. âWith everything that has happened over the past year, I hear a lot of clients talking about the desire to feel good. Owning a home can provide that feeling of permanence and stability. No matter what is going on in the world, your home is your refuge. These intangible and personal benefits are sometimes more important than the financial benefits.
If you are considering becoming a homeowner, contact a local real estate agent and lender who can help you navigate the process from start to finish successfully. A list of experienced professionals can be found by visiting the Greater Lansing Association of REALTORSÂ® website at www.lansing-realestate.com.