Have you been thinking about whether to continue renting or to take the plunge into homeownership? It's definitely a significant choice. Let’s face it — renting often seems like the simpler route, especially when buying a home feels like it might be too far out of reach.

A recent report from Bank of America reveals that 70% of potential buyers are worried about the long-term effects of renting. Their concerns mainly revolve around not being able to build equity and facing increasing rent prices.

You might be feeling the same way — worried about what renting could mean for your future, yet uncertain about whether you can afford to buy a home at this moment. The reality is, if you can get your finances in order, purchasing a home can offer significant financial advantages over time.

Let's take a closer look at why homeownership is something to think about in 2025 and beyond, and how it can benefit your future.

Buying Builds Wealth Over Time

Purchasing a home means you're converting your monthly housing expenses into a valuable long-term investment. According to data from the Census and the Department of Housing and Urban Development (HUD), home prices generally rise over time, as illustrated in the graph below.

Rising home prices are a boon for homeowners. When you own a home, you increase your equity; this happens as you pay off your mortgage and as your home’s value goes up. As a result, your overall net worth also grows.

According to the National Association of Realtors (NAR), it's no surprise that 79% of buyers see homeownership as a smart financial move.

Renting Comes with Rising Costs

Renting might seem like a more budget-friendly option right now, especially considering current home prices and mortgage rates. However, it's important to remember that rent typically rises over time as well. If you look at the data, you’ll notice this trend clearly. Census data shows that rents have steadily increased over the years.

If you choose to rent, expect your expenses to increase each time you renew or sign a new lease. Unfortunately, this won’t help you build any wealth. Moreover, those increasing costs could make it tougher to save for a home purchase later on.

Renting vs. Buying: The Long-Term Impact

When you own a home, your monthly payments are essentially an investment in your future. But when you rent, that money doesn't come back to you; it goes toward your landlord's equity instead of building your own.

Renting is a great option for people who aren't quite ready or able to buy a home right now. However, if you can make the finances work, purchasing a home helps you build equity and positions you for long-term financial success. While renting might feel easier in the short term, it simply doesn't compare to the advantages of owning a home.