The Cost Of NOT Owning Your Home

Dated: 09/15/2016

Views: 258

The Cost of NOT Owning Your Home | Simplifying The Market

Owning a home has great financial benefits. Because of this, more and more experts are growing concerned about the ramifications of a falling homeownership rate. Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

The outcomes of a falling homeownership rate can be devastating. As explained byApartmentList.com:

“Our research indicates that not owning a home has a sizable financial cost, as renters miss out on low mortgage rates and are hit by higher rents.

This phenomenon may exacerbate inequality in our society, as those wealthy enough to invest in real estate benefit from lower interest rates, whereas minorities and younger Americans, hit by rising rents and student debt, risk being locked out of homeownership.”

What proof exists that owning is financially better than renting?

1. A study published by the Joint Center of Housing Studies at Harvard University shows the financial benefits of homeownership. The study mentions five major financial benefits:

  • Housing is typically the one leveraged investment available

  • You’re paying for housing whether you own or rent

  • Owning is usually a form of “forced savings”

  • There are substantial tax benefits to owning

  • Owning is a hedge against inflation

2. Studies have shown that homeowners have a net worth that is 45X greater than that of a renter.

3. Just last month, we explained that a family buying an average priced home this past January could build more than $46,000 in family wealth over the next five years. 

4. Some argue that renting eliminates the cost of taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs are baked into the rent payment already – along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be better from a financial standpoint than renting.

Latest Blog Posts

Mortgage Interest Rates Have Begun to Level Off

Whether you are a buyer searching for your first home, or a homeowner looking to move up to your next home, you should pay attention to where mortgage interest rates are heading.Over the course of

Read More

Mortgage Rates on FIRE! Home Prices Up in Smoke?

Mortgage interest rates have already risen by over a quarter of a percentage point in 2018. Many are projecting that rates could increase to 5% by the end of the year.What impact will rising rates

Read More

Kansas City Real Estate Market Update For 2017 4th Quarter

Hi, welcome to the Kansas City skinny brought to you by Heartland MLS where we dig into the most recent numbers from our market. The number of homes for sale, days on market and months of supply

Read More

Low Inventory Helps Sellers

Why is this woman screaming?? Because she's looking for a home to buy in the KC Metro and there's just not enough inventory. With only 2 months of inventory (meaning if no one else list their

Read More