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.
1. Buying is Cheaper Than Renting
The results of the latestRent vs. Buy ReportfromTruliashow 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:
“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.”
2. Homeownership “Forces” You to Save
According toSavingAdvice.com, homeownership is a great way to save. Their advice is quite simple:
“Homeownership is a “forced” savings account because you own the home, you have no choice – that monthly housing cost has got to be paid no matter what…Homeownership can be an outstanding way to force yourself to be more frugal in the rest of your spending so that you can save and build equity in your home.”
3. Homeownership Offers Several Tax Deductions
According to theTax Policy Center’sBriefing Book-“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System”- there are several tax advantages to homeownership. Here are three:
Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage.
Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.
Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale.
4. Experts Expect Home Price Appreciation to Continue
Every quarter,Pulsenomicssurveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.
Over the next five years, home prices are expected to appreciate 3.22% per year on average and to grow by 17.3% cumulatively, according toPulsenomics’ most recentHome Price Expectation Survey.
Some are afraid that home values may have already peaked. However, we believe that purchasing a home now will prove to be a sound financial decision for years to come. As Warren Buffet said,“When others are greedy, be fearful. When others are fearful, be greedy.”
Author:Derrick Houston Phone: 214-385-1221 Dated: May 4th 2017 Views: 24 About Derrick: Derrick has been in real estate for seven years. Before embarking on a career in real estate, Derric...
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Rogers Healy and Associates Real Estate is a DFW based residential and commercial real estate company that was founded in 2007 by Rogers Healy. RHAdfw is passionate about developing long lasting relationships with clients while representing them to buy, sell or lease any home in DFW.