Many people are thinking about buying a home, but with all the things that affect their economy, they are wondering if buying now is the wisest decision or if it’s better to wait and see. Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit explains:
“The desire for homeownership is strong. Many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook.”
If you’re in this position, remember that it’s important to consider not just what’s going on right now, but what benefits you can expect in the long run.
There is a lot of information about how homeownership can help build a homeowner’s net worth over the long term. But even today, before considering owning a home as a means of accumulating wealth, many people first think of something like a 401(k). If you’re a young prospective homebuyer, it’s especially important to understand that homeownership is another important way to invest in your future. An article from Bloomberg notes:
“Millennials have higher average 401(k) balances than Generation X did when they were the same age, but they’re not any better off financially. . . . A lot of that has to do with being less likely to own a home.”
To understand how owning a home can positively affect your life over the years, look at the data. The same Bloomberg article shows the wealth gap between renters and homeowners over the age of 65 (see chart below). Even if the annual income is the same, the difference is obvious.
So, if you’re looking to build wealth for later success, it may be time to prioritize home ownership. Regardless of whether you rent or buy a home, you will have monthly housing costs either way. Question is: Are you investing in yourself and your future, or are you helping others (landlords) build wealth?
Bottom Line
Connect and discuss your options before you put your homeownership plans on hold. This way, you can get expert advice on how to make the best decisions and invest in your future now.
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Tue, 13 Dec 2022 00:55:36 +0000
