Buy vs Rent
Comparing Owning a Home Vs. Renting? One more Factor to Support Buying a House.
The ongoing debate between renting and buying a home puts many people looking to get out on their own into stasis longer than it should. While it is always a good idea to weigh out the options on both sides of a decision of this magnitude, the facts are that there are fewer long-term support stats FOR renting over buying.
The latest data from the Federal Reserve Survey of Consumer Finances report gives another reason in the “pro” column to buy property over renting.
The net worth of those Americans that own a home is increasing, whereas the net worth of the average renter has decreased in the last few years.
Specifically, the median net worth of a homeowner is $231,400. That’s a 15% increase since 2013, whereas the net worth of renters decreased by 5% from $5,500 to $5,200.
The net worth of homeowners compared to their renting counterparts is 44% higher.
Buy to Save
One of the most critical criteria in the comparison between buying or renting is the financial expense. The costs of a home are more often than not higher than those of a renter, but there’s one benefit that renters’, no matter their relative investment of funds, can match.
Owning a home is a long-term investment to your net worth and your family’s wealth.
As you make your monthly mortgage payment, you decrease your overall liability to the loan. Couple this with the fact that your home will gain value over the life of those payments, and you have a recipe that equals valuable equity. Equity can be used as an asset to borrow against or as a way to determine your financial standing. This is why real estate has again become a sought-after long-term investment strategy.
Do you know what your net worth is? Probably not. However, if you’re making up a pro and con list comparing buying or renting a home, consider the net worth of your future self, and put two checks in the pro column for that criteria.