To Buy or Not To Buy; Is Home Ownership Worth It?

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Some experts are now saying that buying a home may not be the great wealth builder it once was.

They say it may be better to rent a place to live and invest the intended down payment in the stock market.  Yeah, like that’s such a sure bet.

Who decided that buying a home was meant to be an ‘investment’? Yes, most people expect that a home they purchase will appreciate in value.

In doing so, it may provide them with some wealth down the road. Money they can use for other things, like college tuition, vacations, and retirement. But are these the main reasons to buy a home? I think not…

A home represents stability. It is the foundation on which communities and families are built.

Further, if you do want to consider it as an investment, what investment can you use on daily basis without depleting the base? This is an investment you can live in, raise your family in, and manage on your own. I think that’s a pretty good deal.

Some say, now it is better to rent than buy. Maybe this is true for some, but not for all. What about family size, location, and increasing rents;  to say nothing about having no control over the maintenance and upkeep of the property and the units. It’s more than just a simple financial equation. Much has to do with preference.

Mortgage lenders and Realtors need to push back on this conversation and continue to point out the benefits of homeownership. Things like:

• More personal space and freedoms
• Putting down family roots
• Stabilized monthly housing costs
• More control over one’s environment
• Ability to refinance and take equity without affecting the base or paying taxes.

All this while still building wealth!

For some, renting may be advantageous, for most, owning a home is still the best way to go in the long run.

Besides how much return on your investment you can get over the long haul on $6,000 (3% of a $200,000 sale price), you could probably do just as well, if not better, investing the money as a down payment, and living in your investment over the next 30 years.

So, for me, buying is still the best way to go; especially if you are raising a family. Realtors and mortgage lenders need to continue to spread this word.

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.