TEMPLE, Texas — The average American owns three different homes over their lifetime. When and where you purchase that home matters greatly, and currently the home ownership rate is just about 66% of all Americans.
So, with all of the recent economic concern and rising rates, 6 News talked to a professional on whether or not it's a good time to become a homeowner on this edition of Money Talks.
Here are the numbers. Home sales last year dropped to the lowest level in nearly three decades, after elevated mortgage rates and a lack of homes for sale shut out buyers. Existing-home sales slid 19% in 2023 from the prior year.
"When you talk about the conversation of renting versus buying, you can make it simple, or it can get really complex with it," Financial planner Rolandus Johnson told 6 News. "I tell my clients to make sure that you list out pros and cons, but to boil it all down to one deal, one dish here is, if you have the financial spectrum or wherewithal to gain the asset, as in buying, by all means go for it!"
Renting can get a bad rap, but if you're unsure about where you're going to be for the next 3 years, renting is still smart, for multiple reasons.
"But renting it isn't a bad thing, I know that in society it kind of gets a kind of a connotation of a bad thing, 'You are making someone else rich' and all of the different things that they say," Johnson said, "But there is a cost that comes with buying and home ownership and that is one of the cons. You know, in the renting world all of your maintenance and all of those things are pretty much taken care of and rolled up into one cost and when you own your own home those maintenance costs can get up there especially if your insurance is insufficient."
Johnson recommends writing down the pros and cons for your situation and if it's a good time in your life, start building that wealth and equity!
"'What is our plan, what is our goal?' So, if you're wanting to settle down and raise a family and all of those good things then we may be looking at 15 to 20 years down the road, but someone who is on the go every couple of years, timing the market may be an advantage."
And a reminder that the 6 and 7% rates that we are seeing right now are still historically low as compared to the housing boom in the 60's 70's and 80's in the American suburbs.
"If you are listening to the headlines, they would make you think that interest rates are the highest it's ever been in the history of humankind right?" said Johnson. "And that is just absolutely not true, they are higher than what they have been, but we are nowhere near the 70's and 80's so it's still not a bad time to gain the asset if you can. "
And a reminder that interest rates reached their highest point in modern history in October 1981 when they peaked at 18.63%, according to the Freddie Mac Data. And believe it or not, people were buying houses even then, albeit for some people because they had to!
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