Recently, Freddie Mac reported on the benefits of homeownership. According to their report, here are the five benefits that “should be at the top of everyone’s list.”
- Homeownership can help you build equity over time.
- Your monthly payments will remain stable.
- You may have some tax benefits.
- You can take pride in ownership.
- Homeownership improves your community.
Let’s expand on each of Freddie Mac’s points:
Homeownership can help you build equity over time.
Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun reported that now the net worth gap is 45 times greater.
Your monthly payments will remain stable.
When you purchase a home with a fixed rate mortgage, the majority of the payment (principle and interest) remain constant. On the other hand, rents continue to skyrocket. Your housing expense is much more stable if you own instead of rent.
You may have some tax benefits.
According to the Tax Policy Center’s Briefing Book -“A citizen’s guide to the fascinating (though often complex) elements of the federal Tax System” – there are several tax advantages to homeownership. Process of Buying a House
Here are four items from the Briefing Book:
- Mortgage Interest Deduction
- Property Tax Deduction
- Imputed Rent
- Profits from Home Sale
You can take pride in ownership.
Most surveys show that a major factor in purchasing a home is the freedom you have to design the home the way you want. From paint colors to yard accessories, you don’t need a landlord’s permission to make the house feel like a home. Process of Buying a House
Homeownership improves your community.
The National Association of Realtors recently released a study titled ‘Social Benefits of Homeownership and Stable Housing.’ The study explained:
“Homeownership does create social capital and provide residents with a platform from which to connect and interact with neighbors…Owning a home means owning part of a neighborhood, and a homeowner’s feelings of commitment to the home can arouse feelings of commitment to the neighborhood, which, in turn, can produce interactions with neighbors.” Process of Buying a House
There are many benefits to homeownership. That is why it is still a critical piece of the American Dream. Process of Buying a House
Financial Planning: 4 Reasons to Buy a House Today
Homeownership will always be a part of the American Dream. There are advantages to owning your own home (educational, health, social) that far transcend any economic impact. However, we want to look at several of the financial advantages of homeownership in today’s post. Process of Buying a House
1. Buying is Cheaper Than Renting
The results of the latest Rent vs. Buy Report from Trulia show that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that: Process of Buying a House
“Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.” Process of Buying a House
2. Homeownership “Forces” You to Save
According to SavingAdvice.com, homeownership is a great way to save. Their advice is quite simple: Continue reading…