Rising house prices and inflated interest rates have many potential homeowners running scared. It’s easy to see why, as the ever-increasing cost of a roof over your head can quickly become too expensive for the average family.
However, despite the sky-high prices and interest rates, buying a home is still one of the most financially beneficial investments you can make. Let’s take a look at why.
First of all, you reap the rewards of reduced monthly living expenses. When you live in a home you own, you don’t have to pay rent every month, and you’ll also know the amount and timing of your bills, rather than worrying about rent increases or last-minute repairs. Instead, you have access to one large mortgage payment each month that remains the same—with a fixed-rate mortgage, you can plan ahead and budget your expenses without the variable of rent. Moreover, you’ll likely have more disposable income, as even with higher interest rates, the interest you pay for a mortgage is generally lower than the cost of renting.
Building equity is another longterm benefit of owning a home. When you rent, your money is going to the landlord with nothing coming back to you; but when you own a home, each mortgage payment you make gains you equity that is looking out for your financial future. As your home increases in value, the equity that you invest in it will provide you with a larger and larger cushion.
Finally, when you purchase a home, you will receive a taxable deduction for your mortgage interest payments. The tax savings alone can often make up for a large part of the payments on your mortgage, making the process more manageable on a month to month basis.
In addition to providing financial stability and immediate tax savings, homeownership also brings a feeling of security and pride. When you own a home, it’s all yours and even amid increasing prices and interest rates, that fact remains true. There’s no need to worry about lease changes or notices from a landlord—no matter what, you have a piece of property that you can call your own.
Overall, buying a house is still an incredibly financially beneficial decision, no matter what the prices and interest rates may be. While it may feel daunting to take the plunge with such increasing costs, look at the longterm investment you’re making in yourself and your family.
