Considering purchasing a home? Despite the somewhat daunting current mortgage rates, there are two compelling reasons why taking the leap and buying your own property could prove to be a wise decision.

1. Home Values Typically Go Up Over Time

There has been confusion in the past year regarding the direction of home prices. It is important to clarify that nationally, home prices are still on the rise. Historically, home prices tend to increase over the long term, as shown in the graph below.

Based on data from the Federal Reserve, the overall trend shows that home prices have consistently increased over the last 60 years. While there was a deviation during the 2008 housing crash when prices did not adhere to the usual pattern, in general, home values continued to rise.

When you buy a home instead of renting, you have the opportunity to build equity as you pay down your mortgage and as prices of real estate rise. Over time, this increasing equity can significantly boost your overall net worth, according to the Urban Institute.

““Homeownership is critical for wealth building and financial stability.”
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— Urban Institute

2. Rent Keeps Rising in the Long Run

Another factor that could sway your decision towards purchasing a home rather than renting is the perpetual rise in rental prices over the years. While renting may seem more affordable in certain regions currently, you may find yourself facing increasing rent costs each time you renew or sign a new lease. Data from iProperty Management reveals a consistent upward trend in rental rates over the past 60 years, emphasizing the potential long-term financial implications of renting.

When looking to break free from the cycle of escalating rents, consider purchasing a home with a fixed-rate mortgage. This can help you establish predictability in your housing expenses and bid farewell to the frustrations of rental hikes. The stability provided by homeownership is indeed significant.

Your housing payments can be seen as an investment, and the choice is yours: Would you rather invest in yourself or continue paying your landlord?

When you own your home, you're making an investment in your future. While renting may seem cheaper, the money you spend each month doesn't build towards your own equity.

As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR) states:

““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.”
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— Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR)