One in four homebuyers was looking to purchase a home in the first quarter of 2016 because rent was too high, up from one in five in November 2015, according to Redfin. Renters are feeling the burden of their monthly lease while homebuying continues to be the cheaper option by 36% , according to the latest Trulia Rent vs. Buy Report.
See five other benefits of buying a home sooner than later.
Homeowners are less likely to skip out on necessities like healthcare and retirement planning.
Homeownership is a big part of the American Dream. A 2015 study from Zillow showed that renters are paying for high rent in more ways than their rising lease. Zillow’s study found that respondents who were highly rent-burdened were less likely to build savings, more likely to skip out on dental care, doctors visits, prescription medications, etc. and were less likely to contribute to a retirement plan.
Renters miss out on several tax benefits that homeowners benefit from.
Who doesn’t want a tax break? According to Realtor.com®, Americans save around $100 million every year by deducting mortgage interest. On top of that, homeowners, depending on the circumstance, can also deduct private mortgage insurance premiums, property taxes, energy efficient upgrades, home officeexpenses, etc.
Homeowners with fixed-rate mortgages have stability in their monthly housing payments.
Last year, apartment rents alone increased at their fastest pace since before the recession, up 4.6 percent in 2015, according to a report by real-estate research company Reis Inc.
According to the most recent Consumer Price Index, rent has jumped 3.8 percent from a year ago. Homeowners who finance with a fixed-rate product can account for their housing expenditures for the term of their mortgage, regardless of inflation.
Mortgage rates have held near historic lows for the last several years but could rise soon.
Today’s mortgage rates have held near much lower levels and took another dive over the summer thanks to Brexit. But as the labor market and overall economy improves, the Fed is likely to bump their target federal funds rate again in the near future.
Though the federal funds rate isn’t directly tied to long-term interest rates, i.e. mortgage rates, an increase would cause mortgage rates to experience an eventual uptick.
Homeowners build wealth over time.
Price appreciation is one of the largest measurable benefits of owning your own home. Homeownership is an investment that you can literally sit back and watch appreciate. For the last two years, home prices have increased around 5% year-over-year, according to CoreLogic.
Want to know what it takes to become a homebuyer this year? Download our free Mortgage 101 Handbook for everything you need to know about the homebuying and home financing process.