Homeownership: Why It Makes More Sense to Buy vs. Rent

When it comes to finding a place to live, deciding whether to buy or rent is one of the most important questions you’ll face. Renting may seem like the easier option at first, but here are five strong reasons why it makes more financial sense to buy your home vs. renting. 

1. It’s Cheaper to Buy than Rent
   

   Trulia’s most recent Rent vs. Buy Report shows that homeownership remains cheaper than renting, with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. In fact, interest rates would have to jump to 9.1{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} (that would be an increase of about 128{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} over today’s average) for renting to be cheaper than buying.

2. Owning Builds Wealth & Equity Over Time

   Owning your own home is an ongoing investment in yourself and your family. Your mortgage payments allow you to build equity in your home that you can tap into later in life. Consider this thought: every time you pay your mortgage, you are contributing to your own net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.
   Wouldn’t you rather invest in yourself? In the latest Federal Reserve Survey of Consumer Finances, data across all economic and social groups shows that a homeowner’s net worth is 36 times greater than that of a renter.

3. Tax Benefits

   As a renter, you get zero tax benefits. As a homeowner, it’s a different story. You can enjoy tax deduction benefits on your mortgage interest, some closing costs in your first year of ownership, property taxes, and interest you pay on a home equity loan.

4. Stable, Predictable Expenses

   When you own your home and have a fixed-rate mortgage, your housing costs are locked in. This provides a great amount of stability and predictability in your budgeting because you know what your payments will be, as opposed to renters who face unknown rent hikes over the years.

5. General Peace of Mind

   Aside from all of the financial benefits to owning your home, there are important non-monetary benefits to owning, as well. A study by the Joint Center for Housing Studies at Harvard University, as reported on a recent Keeping Current Matters blog, revealed that the top four reasons Americans buy a home have nothing to do with money. Instead, buyers are seeking:

   • A good place to raise children and for them to get a good education
   • A place where they and their family feel safe
   • More space for them and their family
   • Control of that space

   It’s really a matter of being more in control: of your finances and your living situation. Homeownership provides more options for you to be in control of these things – and that can bring greater peace of mind. When you’re ready to buy your new home, visit our website or stop into one of our Louisville, Kentucky communities. We would love to show you around the neighborhood, take you on a tour of our gorgeous models, and show you how easy it is to buy your new home with us!