How Home Value Growth Beats Renting
Over the last 60 years, the average sales price of homes has appreciated at a rate of 5.56% annually, according to the Federal Reserve Economic Data. During the same period, rent has increased at a rate of 3.88% annually which presents a compelling argument in favor of homeownership. When we analyze these figures, it becomes […]
How Home Value Growth Beats Renting
Over the last 60 years, the average sales price of homes has appreciated at a rate of 5.56% annually, according to the Federal Reserve Economic Data. During the same period, rent has increased at a rate of 3.88% annually which presents a compelling argument in favor of homeownership. When we analyze these figures, it becomes […]

a617fe30-381e-461e-8c93-9ea178038d65.jpg

Over the last 60 years, the average sales price of homes has appreciated at a rate of 5.56% annually, according to the Federal Reserve Economic Data. During the same period, rent has increased at a rate of 3.88% annually which presents a compelling argument in favor of homeownership.

When we analyze these figures, it becomes evident that homes have not only appreciated in value at a faster rate than the increase in rental costs, but they have also provided homeowners with a substantial asset that builds equity over time. This discrepancy in growth rates means that, in the long run, homeowners are likely to experience a greater return on their investment compared to renters.

Renters, while they may have the flexibility of moving without the ties of property ownership and might have lower upfront costs, do not gain any equity from their monthly payments. Their money goes straight to their landlord, and they are subject to the annual increases in rent. Over time, as rent continues to rise, renters might find themselves allocating a larger portion of their income to housing expenses compared to homeowners with fixed-rate mortgages, whose monthly payments remain constant.

Homeowners, on the other hand, can lock in their housing costs, particularly if they have a fixed-rate mortgage. Even as the value of their property increases, their monthly mortgage principal and interest payments remain steady. Furthermore, as they pay down their mortgage, they build equity in their home, which becomes a valuable asset. This asset can be leveraged for other financial opportunities, such as funding education, investing, or purchasing additional property.

In addition, homeowners can capitalize on the tax benefits associated with mortgage interest and property tax deductions, and potential capital gains exclusions, which can contribute to the overall financial advantage of homeownership.

In conclusion, while renting may offer flexibility and potentially lower upfront costs, homeownership presents a compelling long-term financial opportunity. The significant difference in the annual growth rates of home prices and rent over the past 60 years underscores the potential for wealth accumulation and financial stability that comes with investing in real estate and the equity building that comes with homeownership.

Download our Buyers Guide and consider getting together with your agent to get the facts of today’s market.

LIST OF BLOGS

Courts of Fox Mill Homeowners Association

Historical Overview Origins and Development: The Fox Mill area, including the Courts of Fox Mill, began as a rural farmland before the mid-20th century. The transformation into a residential area was part of the post-World War II suburban boom. The specific...

Courts Cluster

Historical Context Fairfax County, named after Thomas Fairfax, 6th Lord Fairfax of Cameron, has a rich history that dates back to its establishment in 1742. The Courts Cluster, located centrally within the county, is named for its proximity to the Fairfax County...

Courts at Riverwind

History of The Courts at Riverwind The Courts at Riverwind is a residential community managed by Flannery Property Management, located in Centreville, Fairfax County, Virginia. While specific historical details about its establishment are not directly available from...

Courtland Park

Historical Background Early Settlement and Development: Fairfax County itself was established in 1742, but the specific area of Courtland Park developed much later. Originally, the land that Courtland Park occupies was part of the vast tracts owned by colonial...

Courtland at Rolling Oaks Homeowners Association

History of Courtland at Rolling Oaks HOA Fairfax County has a storied history dating back to its establishment in 1742, named after Thomas Fairfax, 6th Lord Fairfax of Cameron. The creation of communities like Courtland at Rolling Oaks is a more modern development,...

Courthouse Woods HOA

Historical Background The inception of Courthouse Woods HOA can be traced back to the broader development patterns in Fairfax County during the late 20th century, a period marked by suburban expansion around the nation's capital. Fairfax County has a rich history,...

Courthouse Station Homeowners Association

History of Courthouse Station HOA Fairfax County, established in 1742, has a rich history of community development, with neighborhoods like Courthouse Station emerging as part of its suburban growth. Courthouse Station likely developed during a period when Fairfax...

Courthouse Oaks Homeowners Association

History of Courthouse Oaks HOA: Courthouse Oaks HOA is nestled within Fairfax County, Virginia, an area with a rich history that dates back to its establishment in 1742. The community of Courthouse Oaks, however, represents a more recent chapter in Fairfax County's...

Courthouse Commons HOA

Historical Context Fairfax County, named after Thomas Fairfax, 6th Lord Fairfax of Cameron, has a rich historical tapestry beginning from its establishment in 1742. The area where Courthouse Commons now stands would have seen significant historical events, including...

Court of Chandon HOA

Historical Context Formation and Evolution: The Court of Chandon was established during a period when Fairfax County was rapidly expanding due to suburban sprawl influenced by the proximity to Washington D.C. The HOA likely came into existence in the late 20th...

RECENT POSTS

Courts Cluster

Historical Context Fairfax County, named after Thomas Fairfax, 6th Lord Fairfax of Cameron, has a...

Courts at Riverwind

History of The Courts at Riverwind The Courts at Riverwind is a residential community managed by...

Courtland Park

Historical Background Early Settlement and Development: Fairfax County itself was established in...

Courthouse Woods HOA

Historical Background The inception of Courthouse Woods HOA can be traced back to the broader...

Courthouse Commons HOA

Historical Context Fairfax County, named after Thomas Fairfax, 6th Lord Fairfax of Cameron, has a...

Court of Chandon HOA

Historical Context Formation and Evolution: The Court of Chandon was established during a period...

ABOUT  TWENTY
THREE HOMES

The Twenty Three Homes are one of the premiere real estate groups locally, nationally and internationally, specifically dealing with high-end properties and exclusive clientele. Partner with Keller Williams Twenty Three Homes are full service real estate experts whose clients benefit from the custom tailored, hands on service while receiving all the exclusive amenities and resources of one of the most established and respected firms in the business.

GET IN TOUCH