It is a fool’s errand to try and time a market. In theory, it is always best to buy low and sell high. However, in reality, it is very difficult to know whether or not you have hit a peak or the lowest point of a valley. Spending too much time trying to time the market perfectly can actually cause you to miss out on some important opportunities. This is especially true when it comes to the real estate market and buying a house. Thinking about buying a home purely in terms of a short-term investment strategy and obsessing over timing will cause you to miss the forest through the trees. Buying a house is about far more than merely buying at the perfect time. The truth is that buying a home is a long term investment and makes sense no matter where you are in the market cycle. 

Buying a House is Different than other Investments

Buying a home and joining the real estate market is different than investing in other markets, such as the stock market. And, a vast majority of Americans agree. Recent data suggests that 93% of Americans believe that owning a home is a better investment than owning stocks. The respondents of this survey listed a number of reasons why they think that owning a home is a better investment. For starters, they can actually live in a house as opposed to their 401k. Another reason they prefer buying a home is that they perceive the real estate market to be much less volatile than the stock market. Another reason is that buying a home locks in housing costs at a set level instead of watching housing costs fluctuate as rent changes. 

The simple fact remains that when you buy a house you are buying something tangible. You are buying a roof over your head and a place to make and share memories with those you love. This is the part that many people miss when they become so concerned with trying to time the real estate market. When you are obsessed at whether or not the market is at its peak, it is easy to forget that a house is much more than a mere investment. A house is a home. With that being said, there are still good reasons why a house is also a very good long term investment. 

Long Term Investment Benefits of Owning a Home

According to the Federal Reserve, the wealth gap in the United States is steadily rising. Simply put, wealth is being concentrated into the hands of fewer and fewer Americans. What is interesting about this data by the Federal Reserve is what it says about homeownership. Their data indicates that one of the biggest factors that determines one’s wealth is whether or not they own a home. In fact, by their numbers homeowners have a net worth of forty times that of renters. Those numbers are staggering. Simply put, homeowners have more wealth than those who do not own homes. The Joint Center for Housing Studies of Harvard University conducted their own study. According to them, the net worth of homeowners 65 and older is over forty seven times greater than those of renters 65 and older. 

This is important to think about. Many people believe that when you buy a home and take out a mortgage that you are taking on a lot of debt. However, that is an incomplete picture. Taking out a mortgage on a home is a quick way to get you access to the largest asset for most Americans. The beautiful part about this asset is that you do not have to wait until your mortgage is paid off to get access to it. As you pay off your mortgage or your home value appreciates, you grow equity. Equity is an asset and homeowners have seen their equity skyrocket over the past year. Over the past year, the average homeowner has seen their equity increase over $23,000. Think about that for a second. Homeowners have seen their wealth increase by $23,000 merely because they are homeowners. 

Final Thoughts

In an ideal world it would be wonderful if you were able to perfectly time the housing market and buy a house at its absolute lowest point. However, we live in the real world and not the ideal world. Fortunately, we do not have to be in an ideal world to take advantage of the benefits of owning a home. Buying a house is a long term investment regardless of whether or  not you buy at the perfect time. The data is clear that homeowners have more wealth than renters and that is true whether your timing is perfect or imperfect. Remember, when it comes to real estate, it is more about time-in the market and not timing the market. The sooner you buy a home the sooner you can start taking advantage of being a homeowner. 

If you are interested in making the dream of being a homeowner a reality, contact us. The team at Peoples Choice Mortgage is here to see where you are right now and help you do what you need to buy a home. We offer a complimentary, no-obligation mortgage qualifier to see if you can start trying to buy a home today or if we need to come up with a plan so that you can buy one tomorrow. Either way, everyone deserves access to the kind of wealth that can only come from being a homeowner. Start building yours right now.