Investment or Home

By
Real Estate Agent with Carole Jacoby & Co. Real Estate CA DRE#00373261

It is a very confusing time for John Q. Public. Half the economic forecasts say there will be a recession or inflation, while another segment is predicting that we will see neither but the economy will recover slowly.

Half of the personal financial advisors are advising buyers to take advantage of the current real estate market, while the other half is advising that "a wait and see" approach is the wiser option.

It is true that home values could depreciate even further, but that does not make purchasing a home today an unwise choice.

It is a sure bet that rental costs will increase in the next 30 years. However, with a fixed rate mortgage loan, you will know exactly what your housing budget will be for the next 30 years. Owning a home offers certain tax advantages as well.

As a long term investment, purchasing a home is a wise choice. Almost all financial advisors include owning a home as part of your financial portfolio.  An investment in a home today has the potential to yield a large cash return in 30 years. 

Currently home prices are affordable, interest rates are low, affordable financing is available. If interest rates increase even one percent, you could lose tens of thousands of dollars in purchasing power. If home prices would further depreciate, but interest rates would rise, the cost in interest payments would by far out-weigh the savings in purchase price.

A home is much more than an investment. It is a a place to be, a place to live - your own little corner of the world.

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Carole Jacoby

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