As home markets go through their ups and downs, many find themselves asking a simple question: Does it make financial sense to buy a home? Or is renting more cost effective?
Three recent studies show that the former is still the most sound decision.
The first study, from the research firm Pulsenomics, illustrates the cost of owning, vs. the cost of renting as a percentage of monthly income. It shows the overwhelming benefit of buying vs. renting.
The second, from RealtyTrac, compares home price appreciation to wage growth over the last two years. Its analysis shows home appreciation at 17.31% vs. wage growth of 1.3%.
Finally, a recent study by Merrill Lynch looked at the average home equity accumulated among buyers of varying ages. As time goes on, the equity rises to impressive levels, reaching an average of $212,800 for those 65 and older.
In sum, the statistics answer the question handily: Buying a home makes financial good sense given the markets at this time.
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