Are you thinking about purchasing your first real estate property? Understanding the motivations behind others' decisions can be beneficial. According to a recent survey of first-time homebuyers in the real estate market conducted by PulteGroup:

"When asked why they bought their first home, the answer was straightforward: they wanted to. For 72% of respondents, the desire to escape renting or the recognition of homeownership as a wise financial choice served as the primary driving factors."

While this survey focused on first-time homebuyers of newly constructed homes, the same sentiment applies to virtually anyone making their initial foray into real estate. Here's more insight into these two key advantages of homeownership to help you gauge if they are crucial considerations for you as well.

When You Buy a Home, You Have More Stability than When You Rent

Increased Stability in Homeownership Compared to Renting Perhaps you're eager to stop renting because rental rates keep rising. As a renter, each time you renew your lease agreement or sign a new one, there's a possibility your monthly payment will increase.

In contrast, when you purchase a home with a fixed-rate mortgage, your monthly housing costs remain steady throughout the loan's duration. This predictability provides a sense of security that renting cannot match. Real estate journalist Jeff Ostrowski explains it this way:

“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”

When You Buy a Home, You Grow Your Wealth as Home Values Climb

Building Wealth Through Real Estate Appreciation Moreover, homeownership can serve as a valuable long-term investment. While renting may seem more cost-effective at the moment, it does not offer the opportunity to accumulate wealth over time. Mark Fleming, Chief Economist at First American, highlights this critical distinction:

“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. 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.”

Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value appreciates. That’s a significant perk you can’t get if you keep renting.

Considering this, it may make better financial sense to consider buying. Most experts anticipate that real estate prices will continue to appreciate in the coming years at a more typical market rate. Consequently, when you invest in a real estate property, you're not only securing a place to live but also investing in your financial future.

Bottom Line

If you're prepared, buying your first real estate property can be a prudent decision rather than continuing to rent. Let's connect so you can stabilize your housing expenses and initiate the journey of building wealth for your future through real estate.