The desire to own a home is still strong today. In fact, according to the Census, the U.S. homeownership rate is on the rise. To illustrate the increase, the graph below shows the homeownership rate over the last year:
That data shows more than half of the U.S. population live in a home they own, and the percentage is growing with time.
If you’re considering buying a home this year, here are a few reasons why so many people see the value of homeownership.
Why Are More People Becoming Homeowners?
There are several benefits to owning your home. A significant one, especially when inflation is high like today, is that homeownership can help protect you from rising costs. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“In the 1970s, when inflation was around 10%, home prices rose at approximately the same rate. Renters have a harder time in inflationary periods because rents tend to rise along with inflation, whereas mortgage payments stay the same for homeowners with fixed-rate mortgages.”
When you buy a home with a fixed-rate mortgage, you can lock in what’s likely your most significant monthly expense – your housing payment – for the duration of that loan, often 15-30 years.
That gives you a predictable monthly housing expense that can benefit you in the short term, but you’ll also gain equity over time as your home appreciates and you make your monthly mortgage payment.
And with that growing equity, your net worth will increase as well. The latest data from NAR shows the median household net worth of a homeowner is roughly $300,000, while the median net worth of renters is only about $8,000. That means a homeowner’s net worth is nearly 40 times that of a renter.
The U.S. homeownership rate is growing. If you’re ready to purchase the home of your dreams, contact us to begin the home buying process today.