Investing in home.

According to recent reports, homeownership remains one of the best ways to protect your finances against inflation, helping you build wealth over time. In 2019, homeowners had a net worth 40 times greater than renters, and this gap is expected to widen even more by the end of 2024.

Unfortunately, as rising home prices and interest rates make affordability a challenge, people are waiting longer to make this investment, with the median age of first-time homebuyers increasing to 38. If you’re ready to take the leap, we’re ready to help!

Source: Median Net Worth from Federal Reserve Survey of Consumer Finance, NAR

A Spectacular Investment

If you’re young or living on a tight budget, renting a home makes a lot of sense. But there’s no substitute for the power of homeownership to build wealth and financial security. So how do you get the most out of your investment?

CHIC (Pearl)

The benefits of ownership vastly outweigh the upsides of renting, especially over the long term. According to the S&P CoreLogic Case-Shiller Index, home prices in the San Francisco Metro Area rose a whopping 375% from 1990 to 2021, and every mortgage payment builds your equity and allows you to leverage more of that value. Speaking of payments, instead of basically throwing money away on rents that increase with inflation, a fixed rate mortgage locks in your monthly budget for the duration of the loan. You can also deduct interest payments on your tax return and take advantage of other tax incentives. And if you don’t need the home, you can always rent it out and get an even greater return!

GEEK (Kevin)

No matter if you’re buying to occupy or rent, the home you purchase should fit your life goals — and your monthly budget. Buying your dream home might not make sense if you’re starting a family or embarking on a new career. Quick turnarounds can also get you into trouble responding to market fluctuations instead of betting on trends. And it’s incredibly tempting to borrow against your growing equity to pay for non-essentials like a new car when you should be accruing wealth and setting yourself up for the future. A better option would be to consider refinancing as mortgage rates decline. You could also think about maintaining a “rainy day” reserve fund for those unexpected curve balls life likes to throw.

Buying a home is a deeply personal decision and possibly the most significant financial transaction you will ever make. We’re here to help, but in the end, it’s your future — and your choice!

Rentals on the Rebound

As COVID eviction moratoriums expire up and down the state, investment in rental properties is on the rise and back to pre-pandemic levels. Meanwhile, the wages and wealth of renters have remained pretty much stagnant for the better part of this century, while homeowners have seen a surge in their net worth since the early 90s, despite the housing bubble bursting in 2007-08.

The Rent is Pretty Darn High, Too

With increasing interest rates and inflation catching up with the real estate industry, rents are also on the rise, making a lot of folks dream of a fixed-rate mortgage. Want to see the trends in your city? Use this tool from Zumper.

Geek Talk: Migo connects renters with owners

Have you heard? Airbnb and the real estate analytics gurus RealPage have announced an exclusive collaboration on a home sharing app that will make it easier for renters to sublet their apartments and make money while giving property owners a share of the action. It’s called Migo, and it could be a gamechanger for the real estate industry. Learn more from Forbes.