Why Buying A House Is Still A Good Idea
With the bad housing market you would think that right now is the time to rent a home instead of buying one. While it’s a personal choice, I’d like to list a few of the reasons why buying a house, even right now, is still a good idea.
- Low prices. While home prices are still dropping, nobody really knows if this is the bottom or not. Soon enough, prices will begin to climb back up. If you see a house you like that’s priced right, jump on it before someone else does.
- Interest rates. At the moment, interest rates are still pretty low. They will climb back up to their pre-recession levels at some point. If you buy a house right now you can lock in that low interest rate for 30 years.
- Inflation. With time, everything goes up in price. Everything from the cost of gas, a loaf of bread, a gallon of milk and even wages go up. A one hundred dollar bill might be a nice chunk of change right now but it will not be worth as much in 30 years. In the future, we’ll eliminate the penny and then the nickel since they’ll be practically worthless. So if you buy a house right now, you’re locking in your monthly payment, which will not change, for 30 years. With rent, you will always pay the current market prices. So $1,000/mo in rent right now might be $2,000/mo in rent in 30 years.
- Retirement. We all hope to retire at some point rather than working our whole lives. With rent, you will need to pay it every month, forever. If you paid rent from the age of 20 to the age of 80 you’ll pay 60 years worth of rent. With a mortgage, you pay a monthly payment for only 30 years. After that, your monthly payment will be $0.
