Contemplating purchasing a home? Despite the current mortgage rates presenting a formidable front, here are two compelling reasons why, if you're prepared and capable, taking the leap into homeownership might still be a savvy move.

Home Values Tend to Appreciate Over Time

There has been some uncertainty in recent times regarding the direction of home prices. However, make no mistake, on a national scale, they are still on the rise. Over the long haul, home prices generally exhibit an upward trajectory (refer to the graph below):

Drawing from data provided by the Federal Reserve (the Fed), it's evident that home prices have steadily increased over the past six decades. While there was a deviation during the 2008 housing crisis, where prices didn't adhere to the typical pattern, the overall trend has been an increase in home values.

This underscores why buying a home can outshine renting. As home prices appreciate and you chip away at your mortgage, you're steadily accruing equity. With time, this burgeoning equity can significantly bolster your net worth. According to the Urban Institute:

"Homeownership is crucial for wealth accumulation and financial stability."

Rent Continues to Climb Over Time

Another compelling reason to consider homeownership over renting is the perpetual rise in rent over the years. While renting might seem more economical in certain locales presently, each time you renew your lease or sign a new one, you're likely to feel the pinch of escalating rent. Data from iProperty Management reveals a consistent upward trend in rent over the past six decades as well (refer to the graph below):

So, how can you break free from the cycle of escalating rents? Purchasing a home with a fixed-rate mortgage enables you to stabilize your housing expenses and bid farewell to those irksome rent hikes. Such stability holds considerable weight.

Your housing payments essentially constitute an investment, prompting a crucial decision. Are you inclined to invest in yourself or continue funneling funds to your landlord?

When you own your home, you're investing in your future. Even when renting seems cheaper, the money you expend each month vanishes permanently.

As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), emphasizes:

"If a homebuyer is financially secure, capable of managing monthly mortgage expenses, and can handle associated household maintenance costs, then purchasing a home makes sense."

Bottom Line If you're weary of incessant rent hikes and eager to explore the manifold advantages of homeownership, let's engage in a conversation to assess your options.