Is Buying A House & Getting A Mortgage In NYC Worth It In 2023
Home prices in NYC refuse to drop. And interest rates have gone up as well, increasing the cost of homeownership from month to month. Unsurprisingly, many home buyers are left wondering: Is buying a house still worth it in 2023?
The short answer is yes. If you’re financially ready, buying a house is still worth it — even in the current market. Experts largely agree that buying and owning a home remains a smarter financial move than renting for many.
If you’re on the fence about a home purchase or worried about getting a mortgage in NYC with the non-stop rate increases that we see, here’s what you should consider.
Benefits of buying a house in 2023
Despite the financial challenges of the current market, there are plenty of reasons why buying a home is still worth it in 2023.
1. Rising Prices Lead To Increased Equity
One of the chief benefits of owning a home is that over time, increased home equity can add to your net worth and give you a low-cost source of cash as needed. The ability to build equity is what sets homeownership apart from renting, which has no return on investment.
“Home buyers who purchase a home today are still likely to see rising property values and increased home equity. That’s because supply is still relatively low compared to buyer demand, so home prices are likely to keep rising, although at a slower pace,” notes National Association of Realtors (NAR) senior economist Gay Cororaton.
Cororaton points out that, even with rising mortgage rates, home prices have held up. As of March 2022, the median sales price was up 15% year-over-year.
“Although home prices have fallen approximately 30% from their peak level in 2006, they have rebounded over the years, with the median single-family existing-home sales price rising at an annual pace of 3.4% from the fourth quarter of 2006 through the fourth quarter of 2021,” Cororaton adds.
Using this metric, if you bought a home 15 years ago, you likely would have accumulated $197,500 in home equity — $141,700 of which would be price appreciation.
“Over the past 30 years, a homeowner who purchased a typical home and sold it today would likely have built up equity of $360,700,” she continues.
It seems that people nowadays really understand and feel secure in real estate investments. In addition, it’s safe to assume that unlike in 2007 when the housing crisis was based on several unpredictable domino effect events, 2023 will be very different. Clearly, the real estate market in New York City currently holds that view.
2. Homeownership Means Fixed Housing Costs
What’s extra nice about buying a home with a fixed-rate mortgage is that “even though the value of your home will increase, your monthly principal and interest payment will remain the same over the life of your loan,” says Jordan Fulmer, owner of Momentum Property Solutions in Huntsville, Alabama.
Jason Gelios, a Michigan-based Realtor, points out that owning real estate is still the top way to create generational wealth. “When you also couple this reasoning with the fact that rents are increasing at record levels, it makes more financial sense to own a home and gain equity.”
“There aren’t too many investments that can provide the returns that real estate can,” he says.
3. Owning Gives You Opportunities Renting Does Not
Of course, there are several other advantages to buying a home today. These include:
- The ability to customize your home the way you see fit, unlike a rental unit that likely won’t allow for personalization
- Greater privacy from neighbors, especially if you select a single-family detached home
- Home equity that can be tapped via a home equity loan or home equity line of credit (HELOC).
- This money can be used to fund home improvement projects, pay off debt, cover the cost of a wedding or other major expense, or virtually anything you desire.
- The ability to claim a mortgage interest deduction on your taxes if you finance your property
- The chance to build a stronger credit rating and improve your credit score if you finance a mortgage and pay your bills on time.
- And then there are other, less tangible benefits many homeowners experience. For instance, you’ll likely have more room to raise a family and grow your household. And you may build roots in your community and enjoy greater stability over time. Consider that renters are four times more inclined to relocate in a given year versus homeowners, per the U.S. Census.
Contributed With Help From a Local Queens, NY Mortgage Broker: R&J Capital Mortgage & Loan Brokers Of NY 80-02 Kew Gardens Road, Suite 1040 Queens, NY 11415 (718) 520-7000 https://www.getmemortgage.com/.