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.
1. Buying is Cheaper Than Renting
“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
“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
- 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, Pulsenomics
surveys 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.
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.”
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