Understanding the Benefits of Owning Your First Home

<article class="post-812854 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-812854"><span class="entry-date">October 4, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Understanding the Benefits of Owning Your First Home</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Understanding+the+Benefits+of+Owning+Your+First+Home&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Funderstanding-the-benefits-of-owning-your-first-home%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Understanding the Benefits of Owning Your First Home Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20231004-Understanding-the-benefits-of-owning-your-first-home.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>Are you considering buying your first <a href="https://www.simplifyingthemarket.com/2023/09/21/the-many-non-financial-benefits-of-homeownership/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">home</a>? If so, it can be helpful to know what led other people to make that decision. According to a <a href="https://s22.q4cdn.com/957797852/files/doc_news/2023/09/9-14-23-first-time-homebuyers-undeterred-by-rising-mortgage-interest-rates.pdf" rel="noopener noreferrer" target="_blank">recent survey</a> of first-time homebuyers by <em>PulteGroup</em>:</p>
<blockquote><p><em>“When asked why they purchased their first home recently, the answer was simple: because they wanted to. </em><strong><em>Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.</em></strong><em>”</em></p></blockquote>
<p>While that survey looked specifically at first-time homebuyers buying newly built homes, the same sentiment is true for just about anyone buying their first home. Here’s a bit more information to help you think about those two benefits of homeownership to see if they’re a key factor for you too.</p>
<h4><strong>When You Buy a Home, You Have More Stability than When You Rent </strong></h4>
<p>You might want to stop renting because rents keep <a href="https://www.census.gov/housing/hvs/files/currenthvspress.pdf" rel="noopener noreferrer" target="_blank">going up</a>. If you’re a renter, that means there’s a chance your payment will increase each time you sign a new rental agreement or renew your current one.</p>
<p>On the other hand, when you buy your home with a fixed-rate mortgage, your monthly housing payment is predictable over the length of that loan. This stability can give you a peace of mind that renting just can’t provide. Jeff Ostrowski, real estate journalist,<em> </em><a href="https://www.moneygeek.com/mortgage/resources/rent-vs-buy-guide/" rel="noopener noreferrer" target="_blank">breaks it down</a>:</p>
<blockquote><p><em>“</em><strong><em>With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan.</em></strong><em> Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”</em></p></blockquote>
<h4><strong>When You Buy a Home, You Grow Your Wealth as Home Values Climb</strong></h4>
<p>Beyond that, owning a home can also be a great long-term investment. While renting may be the more affordable option right now, it doesn’t provide an avenue for you to grow your wealth over time. Mark Fleming, Chief Economist at <em>First American</em>, <a href="https://blog.firstam.com/economics/the-reconomy-podcast-should-you-rent-or-buy-a-home-right-now" rel="noopener noreferrer" target="_blank">explains</a> that’s an important distinction to consider:</p>
<blockquote><p>“<em>Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. </em><strong><em>Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.</em></strong><em>”</em></p></blockquote>
<p><strong>Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value </strong><a href="https://www.simplifyingthemarket.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><strong>appreciates</strong></a><strong>.</strong> That’s a significant perk you can’t get if you keep renting.</p>
<p>When you take that into account, it may make better financial sense to buy. Most experts project home prices will <a href="https://www.simplifyingthemarket.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">continue to appreciate</a> over the next few years at a pace that’s more normal for the market. That means when you buy a home, not only are you investing in a place to live, but you’re also investing in your financial future. </p>
<h3>Bottom Line</h3>
<p>If you’re ready, it can be a smart move to buy your first <a href="https://www.simplifyingthemarket.com/2023/09/07/get-ready-for-smaller-more-affordable-homes/" rel="noopener noreferrer" target="_blank">home</a> instead of renting. Connect with a real estate professional so you can stabilize your housing payment and start building wealth for your future.</p>
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