Is Homeownership Still A Good Idea?

Many pundits in the national media have begun to write off owning a home as a wise financial move for Americans. In fact, some people now believe that renting is a better long-term strategy. Let's look at two statistics--

• HUD or Housing and Urban Development reports that the average rent payment increase is 5.31% a year at a national level over the last 30 years.
• In Denver the average home price has increased 6.4% a year since 1971 according to MLS data from Your Castle Real Estate.

Currently, the median Denver home price is about $238,000. The average 2 bedroom 2 bath apartment rents for $1,056 a month as of the fourth quarter of 2008 (Source: Dr. Gordon Von Stroh at the University of Denver).

Thus, in 10 years the average 2 bedroom 2 bath apartment in Denver will probably rent for about $1,771 and the median home price could be $442,581 an increase of over $200,000! Even if prices rise just 4% a year, the median home price would be $352,000 in 2019. As a renter you are subject to rising rents on an annual basis; whereas, if you own a home and have a fixed rate mortgage and your monthly mortgage payment does not change!

Plus, as a homeowner you have the possibility of future appreciation, tax benefits, pride and joy of homeownership. A recent survey by the National Association of Realtors revealed that 83% of Americans still believe that homeownership is a good financial decision. Do you agree?