There are several benefits to being a homeowner, but none greater than building real wealth. The median net worth of homeowners is 80x more than home renters (according to new data from the US Census Bureau). That same report revealed that the biggest contributors to wealth are two main assets: home equity and retirement accounts - which represent nearly 64% of households' net worth.
7 Benefits of Home Ownership
- Tax benefits. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.
- Appreciation. Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®. The recent housing crisis has caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating a continued high demand for housing.
- Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
- Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
- Predictability. Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.
- Freedom. The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.
- Stability. Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.
We have helped several of our clients become own their first home, let us help you! We will connect you with the right lender and loan, help you find the perfect home (while staying within your budget), and will guide you through the entire process to make sure you truly understand all of your options and have the best referrals available (home inspectors, appraisers, and more).
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Posted by Ryan Penn on