Hi friends! I want to talk a bit about a few of the different reasons why you might want to consider buying a home in 2021. There are many benefits (financial and non-financial) that come with owning a place of your own! The list goes on and on, so today we’ll just focus on a few.
Mortgage rates are at a record-low
Interest rates for a 30-year home loan have dropped quite a bit since November 2018 when they were at 4.94% (Freddie Mac). Experts predict that rates will remain low, leveling out to an average of 2.9% in 2021.
When you buy a home during a time when rates are this low, your monthly payment is impacted. You can likely get a lot more house for your money AND save a ton of money in the long run. For example, if you were hoping to get a $500,000 home loan to purchase that $530,000 house (no, you don’t need a 20% down payment) your monthly payment would be about $1,976 with a 2.5% interest rate. However, if you got that same $500,000 loan with a 5% interest rate, your payment would be about $2,684. Bottom line – you can afford a more expensive home when rates are low.
Comfort and pride in ownership
Owning a house of your own will undoubtedly give you a sense of pride. You now OWN the space in which you most likely spend the majority of your time! It’s yours! Not only that, but you also get to completely customize it and make it your own. Paint the walls any color you want, remodel the bathroom to match your style, put a zillion nails in the wall for that gallery wall you’ve been dreaming of – YOU get to the call the shots and create a place that’s comfortable and feels like home. It’s time to finally feel settled.
Financial investment + security
When you buy a home, you’re investing in yourself and your future. As a renter, it’s like that money you pay just evaporates into thin air every moth. It’s gone and you’ll never get it back, which is pretty upsetting to think about… especially when you add it all up. As a homeowner, your monthly mortgage payment is like a form of forced savings because you are gaining more and more equity in your home as time passes. Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. Across the country, the median household net worth of all homeowners is $254,900, while the median net worth of renters is only $6,270 (Keeping Current Matters).
The benefits of both office & outdoor space
In the world we’ve been living in since COVID hit last year, having a dedicated workspace as well as an outdoor area is incredibly valuable. Many of us are working from home and we usually can’t be as effective and productive when we don’t have a nice spot to do so. Additionally, having an outdoor space where you can more easily and safely enjoy time with friends and family is a game-changer for your mental health. In many cases, purchasing a home can give you much more room for both of these than you currently have.
A sense of community
One of the foundational needs we all have as humans (whether we realize it or not) is a sense of community. When you purchase a piece of land and the home that’s on top of it, it’s like you’re putting down roots. Homeownership creates stability and drives both civic and community engagement, therefore helping you feel like you “belong”. Getting to know your neighbors, enjoying the park around the corner, making friends with the barista at the local coffee shop – all of these things feel a bit more legit when it’s like you “bought-in” to the neighborhood and are a part of it. Sounds silly, but it’s true!
The benefits to owning a home are endless. If you are interested in home ownership but you have a bunch of questions and are overwhelmed by the process – that’s normal! I am here to help you. Please don’t hesitate to reach out to me anytime! Even if you’re not quite ready to buy, it’s NEVER too early to start planning.