The Real Benefits of Buying a Home This Year

The Real Benefits of Buying a Home This Year

Deciding whether to continue renting or to buy a home is a significant choice, and it's understandable if renting seems simpler, especially if homeownership appears out of reach.

However, it's important to consider the long-term implications of renting. A recent report from Bank of America notes that 70% of prospective buyers are worried about the long-term consequences of renting, such as failing to build equity and facing continuously rising rents. You might share these concerns, fearing the future impact of renting but still feeling uncertain about your ability to purchase a home.

The reality is that homeownership offers substantial long-term financial benefits, provided you can manage the financial commitments. Owning a home allows you to build equity over time instead of paying rent that offers no return. Additionally, with fixed-rate mortgages, monthly payments remain stable compared to the potential yearly increases in rent.

Let’s explore why homeownership is worth considering in 2025 and beyond, and how it could secure your financial future. If you're ready to understand more about how buying a home could be feasible for you, let’s connect and discuss the possibilities.

Buying Builds Wealth Over Time

Buying a home transforms your monthly housing expenses into a long-term investment. Historical data from the Census and the Department of Housing and Urban Development (HUD) consistently show that home prices generally rise over time. This trend underscores the potential for homeownership to not just serve as a place to live, but also as a means to build wealth as your property appreciates in value over the years (refer to the graph below for detailed trends):

Rising home prices benefit homeowners by increasing their equity—the portion of the property they truly own. Equity grows as you make mortgage payments and as the value of your home appreciates over time. This growth in equity not only enhances your ownership stake but also contributes to an increase in your overall net worth.

This financial benefit is a key reason why, according to the National Association of Realtors (NAR), 79% of buyers view owning a home as a good financial investment. The potential for equity and net worth growth makes homeownership a compelling option for long-term financial planning.

Renting Comes with Rising Costs

Renting might seem like the more affordable option in the short term, particularly with current home prices and mortgage rates. However, the long-term reality is that rental costs tend to rise over time. Historical data from the Census clearly demonstrates this trend, showing significant increases in rent over the decades. This ongoing rise in rental costs can make homeownership a more stable and financially sound option in the longer term (refer to the graph below for a detailed look at how rents have escalated):

Choosing to rent means you'll likely encounter increasing expenses every time you renew or sign a new lease, and this occurs without the benefit of building any wealth. Moreover, these escalating costs can make it increasingly difficult to save for a future home purchase, potentially trapping you in a cycle where it becomes harder to transition into homeownership as time goes on.

Renting vs. Buying: The Long-Term Impact

Owning a home turns your payments into an investment in your future, contributing to your personal equity and increasing your net worth over time. In contrast, when you rent, the money you pay each month helps your landlord build equity, not you. Essentially, your rent is money you'll never see again.

Renting is a suitable option for those who aren't ready or able to buy just yet. However, if you can make the financials work, purchasing a home allows you to build equity and lay a foundation for long-term financial stability and growth. Although renting might appear to be the simpler choice in the short term, it doesn't offer the same long-term benefits as owning a home.

Bottom Line

If you're in a position to do so, taking control of your financial future by investing in homeownership can be a highly beneficial move. It's an investment that can provide significant returns over time.

Are you interested in seeing what starter homes are available in our market? Let's connect today to explore your options and start on the path to homeownership.