Have you been debating whether to continue renting or to eventually buy a home? It's a significant decision, and let's be honest: renting can seem like the easier option, especially if purchasing a house is out of reach.
But here's the thing: a recent Bank of America research found that 70% of prospective purchasers are concerned about the long-term effects of renting, such as not creating equity and dealing with rising rents.
Maybe you're feeling the same way: anxious about where renting may take you in the future, yet unsure whether you'll be able to buy right now. The truth is that if you can make the arithmetic work, purchasing a home has significant long-term financial advantages.
Let's take a look at why homeownership is worth considering in 2025 and beyond, and how it can help you prepare for the future!
Buying Builds Wealth Over Time
Purchasing a property enables you to convert your monthly living expenses into a long-term investment. Homeowners directly profit from rising home prices. This is due to the fact that owning a home increases equity, which means that as you pay off your mortgage and the value of your house increases, your ownership stake increases.
Consequently, your net worth increases as well.
Perhaps this is why, according to the National Association of Realtors (NAR), 79% of purchasers believe owning a house is a wise financial decision.
Renting Comes with Rising Costs
Renting may seem more economical in the short term, especially given today's housing prices and mortgage rates. However, in most cases, rent rises over time. This means that if you elect to rent, you will most certainly face increasing expenses each time you renew or sign a new lease - without accumulating any money in the process.
Furthermore, rising costs may make it more difficult to save for a down payment on a future home.
Renting vs. Buying: The Long-Term Impact
When you own a home, your payments become an investment in your future. Renting, on the other hand, means your money is gone forever; it helps your landlord grow equity, not you.
Renting works for people who aren't ready (or able) to buy right now. But, if you can make the arithmetic work, purchasing a home increases equity and positions you for long-term financial success.
As a result, while renting may appear to be a more convenient option, it cannot compete with the advantages of house ownership.
Bottom Line
If you can afford it, make homeownership a component of your long-term financial strategy. It's an investment you'll never regret.
Would you want to see what starter homes are available in your area? Contact Arkansas Real Estate Collective today to discuss your choices!
