The Real Cost of Waiting to Buy a Home
The Real Cost of Waiting to Buy a Home
If you’ve been thinking about buying a home but decided to wait—maybe because prices seem too high or you’re hoping mortgage rates will drop—there’s something important you should know: waiting could cost you more in the long run.
While it might feel safer to keep your down payment in the bank or invest it in something like stocks or CDs (certificates of deposit), buying a home offers powerful wealth-building benefits that these options simply can’t match.
Let’s break it down.
Why Buying a Home is Different
When you buy a home, you use your money to control a much bigger asset. For example:
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With $40,000 down, you could buy a $400,000 home.
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If that home goes up in value by 3% in a year, that’s a gain on the entire $400,000, not just your $40,000.
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This is called leverage, and it’s one of the biggest advantages of owning real estate.
Compare that to putting the same $40,000 in a CD or stocks. Those investments only earn returns on the money you actually put in.
What Happens Over 5 Years?
Let’s say you put $40,000 into three different places and leave it for five years:
| Investment | After 5 Years | Return |
|---|---|---|
| CD (2.5%) | $45,256 | +$5,256 |
| Stocks (7%) | $56,102 | +$16,102 |
| Home | $126,211 | +$86,211 |
That’s the power of buying a home. Thanks to leverage, paying down your loan (building equity), and steady appreciation, you could end up with more than double the returns you’d get from stocks.
Building Wealth Each Month
Every time you make a mortgage payment:
– You pay down a little more of your loan.
– You own more of your home (this is called equity).
– You’re growing your personal wealth, month after month.
When you rent, that monthly payment builds your landlord’s wealth instead of yours.
Big Tax Advantages Too
When you eventually sell your home, the IRS lets you keep a huge chunk of your profit tax-free:
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Up to $250,000 if you’re single
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Up to $500,000 if you’re married and file jointly
Try getting that kind of tax break with stocks or CDs!
But What About High Interest Rates?
It’s true—rates are higher today than a couple of years ago. But here’s the thing:
You can always refinance later if rates drop.
Meanwhile, you’re still building equity and your home is (most likely) still going up in value.
If you wait and home prices keep rising, you could pay more for the same house in a year or two—plus you’ll have missed out on all that equity you could’ve been building.
Bottom Line: Buy When You Can Afford To
If you have the down payment saved up and can qualify for a mortgage, buying now could be your smartest move.
Instead of waiting and hoping prices or rates improve, start building wealth through homeownership today.
Ready to find out what you can afford? Or just have questions?
Send us a message or give us a call. We’re here to help you make the best move for your future.
