Why Buying a Home is the Best Decision You Can Make in 2020
or most of us, 2020 will be remembered as a year of instability and uncertainty, and it’s certainly been a roller coaster in the real estate market. Between the economic crash, the decrease in in-person contact, political instability, and travel difficulties, 2020 definitely feels like one of the worst years to buy a home. So why are homeownership rates up higher than they’ve been in over a decade?
In what feels like an unstable world, we’d expect to see people clinging tightly to their wallets, not shelling out cash to upgrade a new space. But we’re seeing the exact opposite - let’s take a look at why.
- Owning a home is more financially secure than renting
First of all, the economic crash has emphasized the importance of thinking long-term financially. While homeowners comfortably negotiated mortgage freezes, renters found themselves at the mercy of landlords. And while some landlords were friendly about the economic halt, other landlords reminded renters of just how much more stability a homeowner has than a renter. A homeowner has the ability to borrow against their home, refinance their mortgage, and pay lower monthly payments than they would be paying for rent. Compare those perks with a renter who has no equity, very little flexibility to negotiate, and a rent payment that goes straight from their pockets into their landlord’s. It’s no wonder that a homeowner’s net worth is over 44x greater than a renters, and homeowners retire nearly 50x wealthier than retired renters.
- Owning a home improves happiness and well being
Most of us have spent significantly more time at home in 2020 and are realizing the value of having a stable space we can modify to make our own. Families have created home classrooms, employees have decked out their home offices, artists have hunkered into home studios, green thumbs have livened up their gardens, and household chefs have spent more time in the kitchen and dining room and less time eating out. 2020 has been a year of hunkering down and cozying up, and it’s much easier (and more fun!) to design a perfect home space when it’s your own.
That’s likely one of the major reasons why surveys have shown that over 90% of homeowners have said owning a home made them happier, even before 2020 hit us. Owning a home gives you the comfort of stability and the freedom to dive in and make your space your own. And in a year where we’re spending a lot more time at home and we could all use some extra stability, more people than ever have jumped on the opportunity to bring their dreams of homeownership to fruition.
- The economic crash created prime circumstances for homeownership
We have spent more time at home this year, and less time eating out, leisure shopping, and attending concerts, movies, sports, and events. That’s translated to less spending and more saving. Savvy investors have focused on their goals, built credit, and put the money they’ve saved into a homeownership savings account.
Add on top of that a stimulus check and record-low mortgage rates, and 2020 has actually helped give some renters the final push they needed to buy a home.
As we’re nearing the end of the year, mortgage rates are still the lowest they’ve been in 50 years, and it’s never too late to get started on saving and building your credit. If you’re serious about wanting to buy a home but don’t know where to start, send me a message and I can help you create a clear path to your first home!