I’d like to focus your attention on the sales price in each county for the third month in a row.  As you can see, despite increases in the interest rate, home prices are still climbing.  In fact, the average homeowner in America earned $100,000 in equity in just the past three years. If you are a buyer, please don’t wait any longer to purchase.  Remember your mortgage payment is made up of Principal (cost of the home) AND Interest.  You can always refinance later if rates come down, but you can’t change the principal amount.

If you are a seller it is still a good time to make your move.  With fewer homes on the market, you’ll get a fair price for your home.

As you have likely heard, in many cities across the United States, it’s actually cheaper to rent than it is to buy in the current market. Even as we head into a slower time of year for the real estate market, home prices are still increasing, just at a more normal pace than we’ve seen previously.

For most renters, the cost of getting into a home is a high hurdle, but the thought of the mortgage payment can be daunting. Most clients I work with start by trying to buy a home with the same mortgage payment as their current rent, but they often realize that that doesn’t buy a very nice home in a very nice area. So they up the sales price and bite the bullet.

I remember buying our first home in 1991. We went from $700 per month rent (in Silver Spring, MD) to $1200 per month in mortgage (in Berwyn Heights, MD) and I was a tad nervous. But, I have to say all I remember now is how excited I was to be moving into our very own home. We must have naturally adjusted our spending. We sold that home ten years later and made $86,000 in net profit. We effectively made $8,600 per year on that house. We used the cash to buy our beautiful historic home which had payments of $3,600 per month initially but with refinancing came down to $2,800 per month. We sold that home 20 years later and made $160,000. Rent is a wolf in sheep’s clothes. It is lower than a mortgage at the moment, but over time rent continues to rise while the mortgage payment stays the same. Had we never purchased our own home, we would not still be paying $700 per month and we would not have net $168,000 in equity.

If you don’t have the cash for a down payment and closing costs, you will have to start saving and look into one of the many home buying programs available to first time home buyers. If, however, you have the income and the cash on hand but just haven’t made the effort to start the home buying process, please do so. Your complacency is costing you gigantic money. If you need a little encouragement, here are a few good reasons to get yourself in gear:

Home Equity
By owning a home you will accrue home equity which you can use in the future for down payments. Yes, you can also use it for other things, but that is foolish. Barring a life threatening emergency, I would NEVER recommend using equity for anything besides another home. As a renter, you lose out on that opportunity because you’re paying money to your landlord as opposed to yourself/your home.

Build Wealth
Going along with home equity, owning a home allows you to build wealth both personal and generational. Purchasing a home is one of the largest, if not the largest, purchase you’ll make during your life, and it’s also a purchase that can be appreciated over time with proper care and standard market appreciation. When you go to sell your home years from now, you will make more money on it than what you paid for it.

Tax Benefits
Interest payments and property taxes are tax deductible, which can save you money on your monthly mortgage payments. In some ways, this can actually make owning a home about the same, or cheaper, than renting.

Predictable Monthly Payments
Fixed-rate mortgages allow you to know exactly how much money you will need to pay each month for your home. When you, your landlord can increase your monthly rent with each contract (lease) renewal. Property taxes and homeowners insurance can increase, but typically these are small increases spread out over 12 months.

Customization
Your home can be an expression of your personality and customized to your own comfort. I love coming home to my house decorated with paint colors I love. When you improve your home you add to your home’s value. When you rent, you don’t own the property, and your landlord will likely limit the changes you can make to the property. Even if you do make changes, the money spent on improvements won’t follow you when your lease is up.