Some people have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage.
Unless you are living somewhere rent free, you are paying a mortgage - either your mortgage or your landlord’s.
As a paper from the Joint Center for Housing Studies at Harvard University explains:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
If you purchase a home with a 30-year fixed rate mortgage, your housing expense is locked in over the thirty years for the most part.
If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.
As an owner, the mortgage payment will allow you to have equity in your home later in your life.
As a renter, you guarantee the landlord is the person with that equity.
Owning a home might make more sense than renting since home values and interest rates are still lower than projected.
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Jim Starwalt, Real Estate Broker
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2015 Real Estate Market - Buying a Home versus Renting