View this post on Instagram

A post shared by Performance Real Estate | Murrieta Real Estate Team (@performancerealestate)

It's no secret that the cost of living in California is high. But did you know that homes in the Golden State appreciate on average about 5% each year? That means that if you're renting, you're effectively throwing away money that could be going towards building equity in your own home. In this blog post, we'll lay out the case for why buying a home makes financial sense—even in California.

The Math Behind Renting vs. Buying

Let's say you're currently paying $2,000 per month in rent. If rent prices rise by just 3% per year (slightly below the average annual increase), you'll be paying $2,060 per month after one year, $2,123 per month after two years, and so on. In 10 years, you'll be paying almost $3,000 per month in rent!

Now let's say you bought a home for $400,000 with a 20% down payment and a 4% interest rate. Your monthly mortgage payment would be about $1,700—leaving you with an extra $300 each month (after accounting for property taxes and insurance). And because home prices are appreciation at about 5% annually in California, it's likely that your home will be worth closer to $500,000 after 10 years. That translates to equity of over $100,000—money that you can tap into through refinancing or selling outright when the time comes.

The bottom line is this: if you're renting in California, you're paying someone else's mortgage while watching your own housing costs go up each year. By buying a home, you can take advantage of appreciation and build equity of your own—all while locking in your monthly payments at today's rates.

If you're on the fence about whether to buy or rent in California, we hope this blog post has helped sway you in favor of becoming a homeowner. Not only does owning a home provide stability and peace of mind, it also makes good financial sense. So what are you waiting for? The time to buy is now!