Renting certainly has its advantages. For one thing, you don’t have to worry about repairs and maintenance. But owning a home has even more benefits, especially now that mortgage rates are near all-time lows. As a homeowner, you have more stability, you get to call the shots, and there’s the pride of ownership. This year, 2021, may very well be the time to make your dreams of homeownership become reality. Let’s dig in, then, and see why owning a home in Newark is better than renting in 2021.
Low Mortgage Interest Rates
As we just mentioned, mortgage interest rates in 2021 are still at near historic lows. So buying and owning a home in Newark may never again be as affordable as it is now.
Mortgage rates in 2020 were the lowest they’ve ever been. “The year ended with a 30-year fixed-rate mortgage interest rate of 2.67 percent.” Although rates may go up this year, they “are not expected to significantly rise in 2021, according to the federal mortgage company Freddie Mac.” And some industry watchers predict that “rates may go slightly lower in early 2021.”
So now, in 2021, the cost of buying a home with respect to interest rates may be the lowest it will ever be again – while the cost of renting just keeps going up.
Appreciation and Equity
And then there is the appreciation that makes your home increase in value over time and the equity you can build. So owning a home in Newark remains a great investment, which is definitely not the case with renting.
Even though home values may go up and down, a home usually appreciates over the long haul. And this makes owning a home a better investment than, say, stocks, for example…
“Let’s say you have $25,000 to invest. You can buy stocks that hopefully will gain value. Sell that stock in a few years for $27,500 and you’ve gained $2,500 on which you will owe taxes. Invest the same $25,000 as a down payment on a $250,000 home that later sells for $275,000 and you gain $25,000 and will be exempt from taxes.”
In addition, the longer you own your home and pay on the mortgage, the more equity you build – that is, a change in the difference between your home’s value and the amount still owed on the mortgage. This equity can be a hedge against inflation (which is predicted to rise in 2021) and can be used to secure a loan for home repairs.
Owning a home in Newark also has several tax advantages. The substantial deductions that accompany homeownership may allow you to pay much less when April 15 rolls around. Renting, on the other hand, has almost no tax benefits, which ultimately makes owning cheaper than renting.
These tax benefits include deductions for mortgage interest and property taxes. In addition, with COVID-19 and more people working from home, there’s an additional benefit that more homeowners are able to take advantage of. That is the deduction available to people who use a portion of their home for office space. And don’t forget the incentives and deductions for energy-efficient improvements.
Price Stability and Budgeting Control
“Especially for families on a budget, the stability of housing cost makes owning more attractive than renting. As demand for housing and market prices rise, landlords can increase rent and eventually make a rental home or apartment unaffordable. With a fixed-rate mortgage, however, homeowners have peace of mind in knowing the largest portion of their housing cost will not change unless they alter the terms of their mortgage.”
Pride of Ownership and Freedom
Finally, there’s the fact of pride of ownership, along with the freedom to do what you want, that comes with owning a home in Newark. In fact, according to industry experts, pride of ownership “is the number one reason for buying a home.” There’s just nothing like owning your own home and realizing the American dream. And when you own your home, you can also change it or add to it in any way you want, unlike with renting.
“Owning allows more freedom to create living spaces tailored to personal tastes which renting often prohibits. With families spending more time at home, the pandemic created a desire for homes tailored to meet specific needs like a home office or gym. Families see owning a home as an opportunity for long-term stability allowing them to develop roots in a neighborhood and community.”
It’s pretty plain, then, that the benefits of owning your own home far outweigh the few benefits of renting. Still, before you can enjoy the benefits of owning. you have to find the home that suits your needs and purchase it at a price you can afford. And that’s where your Newark agent can help. So if you’re ready to get in on the benefits of owning a home in Newark, contact us today at (848) 299-4847.