It’s well-known that real estate has been considered a sound, long-term strategy for building wealth. According to a recent study, homeowner wealth is significantly higher than renters. “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter,” as pointed out by National Association of Realtors (NAR) Chief Economist, Lawrence Yun.
As I mentioned last week, prospective buyers who are holding out for mortgage rates to drop could very well contend with higher prices, as suggested by Barbara Corcoran. I always advise clients to weigh all their options and think “long-term” before making a big life decision like purchasing a home. Everyone’s situation is unique and there may be other factors that are preventing them from moving quickly.
Nevertheless, investing in home ownership whether today or next year is smart and in fact, was voted the best long-term investment for the 11th consecutive year in a recent Gallup poll. More Americans continue to name real estate as the best long-term investment over stocks, gold, savings accounts, CDs or bonds.
Home ownership is one of the safest investments one can make. Granted the housing market will always have its ups and downs, yet in the long-run, home ownership means your net worth is growing as your home appreciates and you pay down your mortgage. Buying a home is a powerful financial decision and a smart addition to maintaining a diverse portfolio.