Ahhh, the age old question. Should I buy or just continue to rent. Generally, if you are going to be staying in one location for the next 4-5 years minimum it is best to buy. However, if your job might have you moving around it could be best to just rent for the flexibility. Also, it's important to understand home repairs do come up, so be sure you have some money save up for a rainy day.
Let's look at the money spent over time if you rent:
This money is gone, and rents typically increase every year or so. In addition to this, the national average rent prices have been increasing faster than wages have. This means your paycheck is not increasing the same rate as rent costs year to year. This can be a big problem over time, not to mention all the money is lost as a renter.
Now let's look at some some scenarios if you purchased a home. In the Hendricks County areas such as Avon, Brownsburg, Danville, and Plainfield, home prices have been steadily climbing the last several years. Each year you wait it costs more to purchase due to higher home prices. The rise and fall of interest rates also have an effect on this as well, but we will leave that discussion for another blog post. One example just how much home prices have changed is a house I sold in 2016. The buyer bought it for $142,000, and today could list it and sell it pretty quickly for $165k-170k. That is a $23k-$28k increase in value! Had this buyer continued to rent instead they would have missed out on this equity, and they likely would have seen their rent payments increase during that time as well. Your payments on your home purchase are fixed for the life of the loan on most loan types.
Using the same example buyer above, lets say they have started a family and after a few years want to move up in house size. This is a common scenario. The homes equity can be rolled into the new home purchase for the down payment, costing this buyer nothing out of pocket.
Home ownership is basically a forced savings plan for something you have to have anyway, which is a place to live. In the long run its great for building your wealth and securing a better future. A typical nice 3 Bedroom, 2 Bath rental in our area rents for about $1,350 per month. The same house that you own would be less than $1,000 per month after your mortgage, taxes, and insurance. What could you do with a few hundred extra bucks a month in your pocket, while you are gaining monthly equity in your home? Please reach out to me today to get started!