If you are currently one of the many Americans debating between buying a new home or renting, monthly cost is probably what your main driving force is for the end decision. However, buying versus renting doesn’t just come down to the monthly payment , rather it comes to the total equation and what is best for you. Parry Custom Homes Homes, a premier Pittsburgh custom builder, shares important factors to consider when making the decision to rent versus buy.
Owning a home is typically the building block of household wealth, considering the fact that home owners have a median net worth of $200,000 on average, while renters of homes have just over $5,000. A stark difference in comparison.
In the U.S., currently, there is over 13 trillion dollars in home equity among all the homeowners across the U.S. This equates to about $175,000 per household that owns their home, according to the Federal Reserve across about 75 million homeowners.
Paying money towards your mortgage each month will help you produce more wealth by freezing payment amounts and building equity through forced savings. While you do have to have money to put down on a home and be able to qualify to purchase one, the loan options available to those wanting to buy a home are much more flexible than they have been in years past, making home ownership more attainable for many.
While the prices of homes are rising along with interest rates, the main thing to consider is when buying a home, you have yourself on a forced savings plan. Over the life of your loan, you begin to pay down and pay off the interest and begin to pay towards the equity.
Over time, your mortgage payments will go towards the equity and your home will become an asset of savings that you will be glad to have 20 or 30 years from now, especially since the values of homes tend to go up dramatically over that long a period of time.
Take the renting scenario. What you are paying to rent a home now will probably not be what it will cost to rent the same home 5, 10 even 15 years from now. The amount will only go up as time goes on and as costs do with everything. However, if you have a 30-year fixed mortgage, you can plan for a set amount on your home and give you a more affordable path down the road through the life of your loan.
So, when making the decision to rent versus buy, consider the longer-term goals you might have for yourself and your family financially. If owning a home is out of reach now, take the steps you need now to make home ownership the option you can choose in the coming years. In the long run, you will be so glad that you did.
Parry Custom Homes is an established homebuilder in the Pittsburgh area. Call or contact us today for more information.