The American Dream of homeownership is alive and well. Recent reports show that the U.S. homeownership rate has rebounded from previous lows and is headed in the right direction. The personal reasons to own differ for each buyer, but there are many basic similarities.
1. Homeownership is a Form of Forced Savings
Paying your mortgage each month allows you to build equity in your home that you can tap into later in life for renovations, to pay off high-interest credit card debt, or even send a child to college. As a renter, you guarantee that your landlord is the person with that equity.
2. Homeownership Provides Tax Savings
One way to save on taxes is to own your own home. You may be able to deduct your mortgage interest, property taxes, and profits from selling your home, but make sure to always check with your accountant first to find out which tax advantages apply to you in your area.
3. Homeownership Allows You to Lock in Your Monthly Housing Cost
When you purchase your home with a fixed-rate mortgage, you lock in your monthly housing cost for the next 5, 15, or 30 years. Interest rates have hovered around 4.5% since spring and are projected to increase to close to 5% by the end of the year. The value of your home will continue to rise with inflation, but your monthly costs will not.
4. Buying a Home 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 98 of the 100 largest metro areas in the United States and 26.3% nationwide.
5. No Other Investment Lets You Live Inside of It
You can choose to invest your money in gold or the stock market, but you will still need somewhere to live. In a home that you own, you can wake up every morning knowing that your investment is gaining value while providing you a safe place to live.