Many people are thinking about buying a home, but with everything affecting the economy, some wonder if it’s an intelligent decision to buy now or if it makes more sense to wait it out. As Bob Broeksmit, President and CEO of the Mortgage Bankers Association (MBA), explains:
“The desire for homeownership is strong. Many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook.”
If you’re in that position, remember that it’s essential to consider what’s happening today and what benefits you may gain in the long run.
There’s a lot of information about how homeownership helps build a homeowner’s net worth over time. But even today, many people think first about things like 401(k)s before they think of owning a home as a wealth-building tool. If you’re a young prospective homebuyer, it’s essential to understand how homeownership is another crucial way to invest in your future. An article from Bloomberg notes:
“Millennials have higher average 401(k) balances than Generation X did when they were the same age, but they’re not any better off financially. . . . A lot of that has to do with being less likely to own a home.”
To help you understand how much owning a home can positively impact your life over the years, take a look at what the data shows. The same Bloomberg article helps show the gap in wealth between renters and homeowners 65 years and older (see graph below). The difference is substantial, even when incomes are similar.
So, it may be time to prioritize homeownership if you want to create wealth to help set you up for success later on. That’s because, whether you decide to rent or buy a home, you’ll have a monthly housing expense either way. So, the question is: will you invest in yourself and your future, or will you help someone else (your landlord) increase their wealth?
Bottom Line
Before putting your homeownership plans on hold, let’s discuss your options. That way, you’ll have expert advice on how to make the best decision right now and the best investment in your future.