Good Money Problems to have

Good Money Problems to Have. The financial benefits of buying an Arizona home versus renting an Arizona home are always up for debate. The main benefit that often gets left out is the ability to build wealth as a homeowner, creating various financial opportunities that might not be available in renting.

Buying an Arizona home is often seen as the best way to build wealth over the long term, but there are many benefits of renting that can help with your bottom line. A prime example of this is investing in stocks and bonds that potentially grow in value over time if you rent.

Over the last 30 years, home equity has been a booming investment. Not only have Arizona homeowners increased their net worth, but they have also been able to unlock substantial gains from their homes.

This is because the appreciation of housing values over the past decades build equity. A decrease in home mortgage interest rates and an increase in incomes also helped! In fact, with low-interest rates and low inflation, homeowners are likely to see a return of up to 4% per year on their investments.

Homeowners who missed out on these equity gains can still look forward to single-digit returns for the next few years before they see double-digit returns again.

With a home being a significant investment, homeowners' gains over the last 30 years have been substantial. Even though the Arizona market has cooled off a bit, experts are still calling for home equity to grow substantially over the next few years.


Homeownership is one of most people's most important financial goals, but some choose to rent their home instead of owning. Rental properties at one time offered lower monthly payments, and they also provided the opportunity to build the landlord's equity, something renters cannot do.

Ultimately, renting your home will not give you the same financial benefits as building equity with a traditional mortgage. Renting is cheaper initially (not having a down payment), but it costs more in the long run because you are constantly paying the rent with no equity building up.

Rentals have traditionally been a better option for people who are on a tight budget. But with the increase in demand and supply, rental properties have become more expensive to rent.

More and more people were turning to rent because it's a cheaper up-front option to buy a home. But with low-interest rates and high prices, the cost of renting is also going up.


Buying a home is a robust financial decision, and it can help build up your equity and spending power.

Buying a home is the best way to build up your savings because of the forced savings of paying for your mortgage. You will also benefit from the tax deduction, which ranges depending on your income level.


Looking Forward at the Equity To Come

The latest home value expectations forecast is the Home Price Expectation Survey, a survey of over 100 economists, real estate experts, and professional investment and market strategists. Home values are expected to increase as follows:

2021: 11.74%

2022: 5.82%

2023: 3.94%

2024: 3.56%

2025: 3.55%

The real estate market has shown consistent appreciation year after year, with the survey estimating it will continue to appreciate 31.8% over the next five years. The graph below illustrates the appreciation a potential buyer could earn while using a $350,000 home as an example:

Graph future equity predictions

The graph shows a potential home equity increase of $111,285 in household wealth over five years.


Bottom Line

Perhaps you can increase your wealth substantially by purchasing a home. A home is typically one of the most significant investments you make. In some cases, it is the single most effective investment for a household. Your home appreciates, too, creating financial opportunities that may not exist otherwise.


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