The question of buying vs. renting a home has gotten more attention than ever since the housing bubble burst in 2008. Many young people are still hesitant to buy a home after witnessing the rapid decrease in prices around that time. Nonetheless, there are some very good reasons to seriously consider purchasing a home in Chicago instead of renting one. Here are five of them:
1. You can build equity
Buying a home allows you to build equity – a part of the mortgage you pay (the principal) goes towards your ownership of the home, and effectively remains yours. With rent, 0% of the money you pay stays yours.
2. House prices are on the rise
In the vast majority of metropolitan areas, the housing market has rebounded, so potential homebuyers don’t really have to worry about prices going down any further. The prices are still low enough to constitute a good deal, but the fact that they are rising means that homebuyers might want to act now instead of waiting.
3. Interest Rates are Low
Mortgage interest rates are up slightly from their all time lows, but at around 4%, they’re still some of the lowest in history. Locking in one of these great rates for the next 30 years will ensure you get a great deal on housing when both interest rates and rent prices rise in the next few years.
4. Tax Benefits
The US government strongly subsidizes the purchasing of a home, by making mortgage interest into a tax deduction. That means that even the portion of your mortgage payment that doesn’t go to equity (see #1), the interest, will get you a substantial break come tax season.
These are all good reasons to buy, but ultimately, you should let the numbers speak for themselves. The New York Times has a comprehensiveRent vs. Buy Calculator, which will shed more light on what the right choice is for you.