Houses For Sale Charleston SC: Home Ownership Builds Wealth
If you are searching houses for sale Charleston SC, then you are probably aware of the financial benefits of home ownership.
Owning a home allows you to build wealth through home appreciation (and paying down your mortgage).
Whether you rent or buy, either way, you are paying somebody’s mortgage.
But just how much wealth does home ownership provide?
Every 3 years the Federal Reserve releases a report showing the average wealth for a family that owns their home versus a family that rents their home.
The National Association of Realtors (NAR) took that information and projected those numbers for 2015. Here are the results:
Notice that between 2010 and 2013 the average family wealth for renters remained the same.
In that same time frame, home owners saw an $8,000 increase–an increase greater than the total average family wealth for renters.
Here is another look at the numbers, better illustrating the divide between renters and owners:
Ok, so that is great news for anyone that bought a house in the last 5 years.
But what about going forward? The next Federal Reserve report isn’t out until 2016.
In the meantime, here are some projections based on information from the latest Home Price Expectation Report just released from NAR.
This is assuming a purchase of a $250,000 home and basing the wealth building on projected appreciation rates for the coming years.
Now, the question becomes “what is the cost of waiting to buy?” Here is another infographic to give you an idea, this is from Realtor.com:
This graph shows what an average family can accumulate in wealth just by equity in their home.
It then shows you how much of that equity you miss out on by waiting to buy.
You can see localized numbers by clicking here.
Sure, these numbers aren’t set in stone.
But, they illustrate the bigger point, and help you better realize how home ownership helps you build wealth.
Owning Is Cheaper Than Renting
In today’s market, it is actually cheaper to own than it is to rent.
With interest rates still at or below 4%, usually a mortgage payment will be less than rent.
Another benefit of this is the fact that with a mortgage, your monthly housing payment will remain the same.
What do you think the chances are that over 30 years rents won’t go up?
Here is a look at the median rent over the last 30 years to help you answer that question.
Plus, home owners spend less of their monthly income on mortgage payments than renters do on rent payments.
Each month you pay your mortgage, you are putting money towards you. Rent payments go towards your landlord’s benefit.
While your monthly payment with a mortgage remains fixed, your income will likely increase.
That means more money to invest, save, or do whatever you like.
Renters don’t have that luxury, and you can see that reflected in the disparity between the wealth of owners and renters.
If you are looking to buy a home in Charleston SC, then you should know that home ownership is the easiest path to building wealth (ok, so hitting the lottery is the easiest–but which one is a more realistic plan?)
If you are looking for houses for sale Charleston SC then make your search much easier by visiting my Pam Marshall Realtor website.