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It’s 2015, resolutions anyone? If I were searching for a good 2015 resolution I’d resolve to have a cup of coffee, but not any cup of coffee. I’d resolve to:

1. Investigate buying a home and;

2. If the decision is to move forward find the best method to buy a home;

3. Have that cup of Joe to get answers to your questions before making your resolutions.

Numbers 1 and 2 are important but # 2 is more important than #1. It’s why we promote Homebuyer Associates coffee talk. Resolve to buy a home but fail to do it correctly and you may end up with a problem.

It’s not the in thing to own a home today, so let me share a story. Be forewarned, it’s not a pleasant visual.

The jeans were mauve, the shirt had flowers on it and there was an old green army jacket in the mix – faux hippie. It was the in look, then. Honestly. The look wasn’t going to last and it didn’t. I knew I’d eventually cut my hair and go the black suit, white shirt, blue tie route – and I did. I moved from the “in” thing to the correct thing.

Since the housing bust of late 2006, renting has been in (mauve jeans-flowered shirt-green army jacket) and owning a home has been out. According to the New York Times, since 2004, the number of renters has increased by 25% while the number of homeowners has fallen by 6%. The Times asked, “Are the benefits of homeownership overrated?” Their editorial board answered “No, home ownership is not overrated” and “as a means for building wealth there is no practical substitute.”

I wrote about the benefits of home ownership in September of 2012. Homeownership can act as a savings account and create long-term equity. For those who don’t save – which, based on studies I’ve read is the majority of people – a mortgage becomes a forced savings account. I know this because I said so in 2012 as did the New York Times in November, 2015.

The Times editorial noted the “net worth of homeowners over time has significantly outpaced that of renters who tend as a group to accumulate little if any wealth.” I checked this with two other studies – a 2013 Federal Reserve Study and Harvard’s Joint Center for Housing Studies (2013). Each confirmed that renting only offered the potential for comparable wealth building if renters invested the difference between the cost of renting and owning. Most renters don’t invest the difference. It’s human nature. The Harvard study went on to say:

“… As virtually all of the studies document, in practice, owning has consistently been found to be associated with greater increases in wealth…”

If it’s about a home and long-term wealth building, how do you get started? You start by gathering information which is the purpose of our coffee talk – consider it an act of discovery. What I would not do is place value in what some local and national real estate sites have to say about the process of buying a home. This isn’t objective information, it’s selling.

In many urban areas, the Milwaukee 4-county area among them, mortgage rates and home prices now favor owning over renting. A home provides a place to live and offers the opportunity to create equity and long-term wealth accumulation.

If you have interest in discussing home ownership, contact Seamus or me for a coffee talk. That’s all it is – coffee and talk. You ask your real estate questions and we provide some real estate insight. We might even suggest you keep renting but then we’ll also suggest you begin saving.

Thanks for reading,
Michael D. Holloway

Homebuyer Associates
Michael D. Holloway / Seamus Holloway

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Homebuyer Associates
1835 N. Riverwalk Way
Milwaukee, WI 53212
Phone: 414-254-4129