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The dream of homeownership has been out of reach for many Americans lately due to a combination of factors. High mortgage rates have not only put pressure on buyers but have also triggered a domino “lock-in effect” on supply, as many owners feel “locked in” with the lower mortgages they secured a few years back and are hence unwilling to sell.
In addition, high home prices — partly due to low inventory — and inflation have left many buyers on the sidelines.
Now, while mortgage rates have come down in recent weeks, it might be a while before inventory increases significantly and therefore a while until prices decrease in a significant way as well.
Yet, some experts say that despite these challenges, homeownership is still worthwhile for many reasons, including the fact that it provides stability and enables owners to build equity.
Another reason why buying a home is a wise financial move is that historically, it’s also a vehicle of wealth-building in the country.
Consider this: Homeowner wealth is a startling 40% higher than renters, according to a National Association of REALTORS® report. “Property appreciation has surged along with home prices in the last decade, giving most homeowners more than $100,000 in equity over that time period and lending further evidence that homeownership is an important avenue to build household wealth,” per the report.