With rates near historic lows and an improving housing market, opportunities for first-time homebuyers abound. Plus, factor in the current rent vs. buy cost analysis and you may find that homeownership makes good financial sense.
- Buying a home is on average 38% cheaper than renting across the nation and in all of the 100 largest metro areas.
- Today's rent payments are rising faster than incomes. With a 30-year fixed-rate mortgage, payments will remain the same for the life of the loan.
- 30% of America's families say real estate is the best long-term investment today, ranking it above gold and stocks.
Affordability aside, homeownership provides you with an opportunity to build equity and stability over time, become a part of a community, and create a home that is uniquely yours.
If you are looking to buy and have a secure job, strong credit and money saved for a down payment of at least 5%, there are some real positives in your favor: many markets are still very affordable; mortgage rates are historically low; and home values, while moderating in appreciation, are expected to rise an average of 5% in 2014.
Keep in mind that with home values and mortgage rates rising, renting may soon become cheaper than buying in some markets. However, according to Trulia, rates will need to hit 10.6% in most markets for the math to side with renters. We haven't seen rates that high since the late 1980s.
Remember that homeownership is not the right route for everyone – and for many families, renting makes sense based on financial circumstances, future plans, and desired lifestyle. Learn more about the Rent vs. Buy decision.
Are You Ready for Homeownership?
Visit our Ready to Buy resources to learn more about how much you can afford, the importance of good credit, choosing the right mortgage, and steps to get started.
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