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Although 90% of Americans believe that owning a home is part of the American dream, many no longer believe that it is an essential part of life, according to a recent survey by IPX1031. Only 33% of Americans believe that owning a home is a necessity; the other 67% say it’s a lifestyle choice.
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But what do the experts say? Can you have a financially secure life without owning a home? Here’s what financial professionals told GOBankingRates.
Buying a house does not make sense for everyone
“While the old adage says that owning a home is the path to wealth, it doesn’t suit everyone,” said Jay Zigmont, Ph.D., CFP, founder of Childfree Wealth.
For example, in an increasingly remote world, many people are no longer tied to a particular location for their jobs and may want to take advantage of this location independence.
“If you are more mobile or a bit nomadic, buying a house may not be a good idea,” Zigmont said.
In this case, you can look for alternative ways to invest in real estate.
“You can still get real estate investing exposure through REITs or other tools without owning a home,” Zigmont said.
Buying a house makes sense if you want a house
Paul Peeler, financial adviser for the Integrated Financial Group, said buying a home can be a good investment, but only if you are looking for benefits that go beyond the financial.
“Homeownership is not essential to ensure financial security, but it can definitely be a valuable long-term wealth creation tool,” he said. “I encourage people to do the math for themselves. Generally speaking, owning a property for a long period of time outweighs the value of investing the down payment and paying rent, even after accounting for taxes, insurance costs, property maintenance, and increases. for rent”.
However, this should not be your primary motivation for buying a home.
“Most people don’t buy a home for the financial benefits, but rather for the intangible benefits that a home provides,” Peeler said.
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The bottom line
Experts agree that buying a home it is a choice rather than a necessity, but one that can be a wise decision if buying a home fits your lifestyle and budget.
“Right now, owning a home is a lifestyle choice, as renting is always a choice,” said Matthew Locke, UMB Bank’s national mortgage sales manager. “However, owning your own home still makes a lot of financial sense for most people. Owning your home allows you to purchase an asset that will typically appreciate over time, and rental costs have also risen sharply in recent years. Most studies indicate that people who own their homes have a higher overall net worth compared to renters.
“The act of owning a home is not completely essential to financial security, but doing so allows you to better control your financial variables,” he continued. “When you buy your home, you have the option of locking in the cost of your home, rather than having the landlord control the rent.”
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This article originally appeared on GOBankingRates.com: Is Homeownership a Financial Necessity or a Lifestyle Choice?
Source: news.google.com