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    While home prices and mortgage and interest rates are rising, so are monthly rents. Rising rates and prices, however, should not be enough to keep you from purchasing a home.

    Take a look at the graph below, rents are absolutely skyrocketing. The big difference is that when you rent, rising costs benefit your landlord’s investment strategy but provides no return for you.

    When you buy a house, your monthly mortgage payment acts as a form of forced savings. You build equity over time as you pay down your loan and as home values rise (and by extension, your own net worth). Not to mention that you’ll be able to lock in your mortgage payment for the life of your loan (typically 15 to 30 years).

    The median rental price increased 19.8% year on year in January 2022. Despite current buying conditions, this beats monthly homeownership costs in most large markets.

    The median rent in the 50 largest metro areas increased to $1,789 and today it’s even higher.

    ATTOM’s 2022 Rental Affordability Report examined the differences between a median-priced home and a three-bedroom rental in 1,154 counties across the country. According to the findings, home ownership is more affordable in 58% of the counties studied.

    The Sun Belt, which includes cities such as Miami, Tampa, Fla., San Diego, and Las Vegas, is experiencing the greatest increase in rental prices. Rents in these areas increased by more than 25% year on year.

    While many first-time buyers in other markets have turned to renting due to limited inventory and stiff competition, experts maintain that buying is the best long-term financial option for building wealth.

    Stop Paying Someone Else’s Mortgage!

    According to a 2019 report on household wealth by the United States Census Bureau, the wealth gap between homeowners and renters is striking: the median net worth of homeowners is 80 times greater than the median net worth of renters.

    Home equity accounted for the largest portion of net worth (34.1%) in 2015. Furthermore, most of the household wealth was comprised of a relatively small number of assets. In 2015, for example, two asset categories accounted for 62.9% of household net worth: home equity and retirement accounts.

    For Real…Check This Out

    Every three years, the Federal Reserve sponsors a research program that looks at the net worth of homeowners in the United States compared to renters. The report created is called the Survey of Consumer Finances, and the latest data (from 2019) has some staggering results.

    According to the report, the wealth gap between homeowners and renters has widened dramatically. In 2010, the difference was $198,000, implying that the average homeowner had $198,000 more wealth than the average renter. When you look at the most recent data from 2019, you can see that the gap has grown to $249,000, a 25% increase.

    In 2019, the average net worth of home renters in the United States was only $6,270. For homeowners, it was $254,900. This means the average homeowner in the United States is 40 times wealthier than the average renter. Let that one sink in.

    Possibly The Two Big Advantages of Purchasing a Home

    Owning a home has numerous advantages, but here are arguably the top two:

    • Increasing your wealth: Each mortgage payment increases your equity and brings you closer to full ownership. If the value of your home rises, whether because of a hot market or desirable home improvements, you could profit handsomely when you sell.

    • Tax breaks: Only homeowners are eligible for property tax deductions and may be able to deduct mortgage interest on their taxes. Because most of your monthly payment is initially applied to interest, a mortgage interest deduction could significantly reduce your tax bill.

    Start Living the Dream, Free and Clear

    The prospect of living rent or mortgage-free someday appeals to many people. That is something you will never be able to do while renting.

    Holly Johnson, a Business Insider contributor, and her husband decided to pay off their mortgage by the age of 40. “Not having a mortgage payment is one of the best things we’ve ever done for our finances and sanity,” Johnson writes.

    You’ll still be responsible for some expenses, such as insurance and property taxes. According to Johnson, they spend about $3,400 per year on taxes and insurance – yes, a YEAR.

    Now compare that to the never-ending costs of renting.

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