Reasons to Own a Home

Morgan Stanley recently reported that the current home ownership is around 59.2%, the lowest since tracking began by the Census Bureau in 1965; however, more than half of Americans are still homeowners. In spite of the downward economy there are numerous benefits to homeownership and purchasing now.

Pride of Ownership: Probably the number one reason people are driven to own their own home. You can make your home a reflection of your taste through design of permanent features, decorating, and landscaping. It’s an investment in your future that provides a sense of security and stability.

Equity: Paying a landlord is like throwing your hard earned money into a roaring fire. It’s gone forever. In exchange for paying a mortgage you are gaining ownership of something. You may still owe money on it but the home may very well be worth more than you owe. This translates to building equity.

Budgeting: Most leases are not rent-controlled resulting in a chance of a jump in prices at each lease renewal time.  With a fixed rate mortgage your monthly payment is the same amount throughout the life of the loan.

Cheap Mortgages: We are currently experiencing the lowest rates on record. What’s not to love about a 30 year home loan for about 4%?  We have too soon forgotten that just a short two years ago they hovered around 6.3%. These rates will not last forever, if inflation increases these rates will rise again but if we get deflation the rates will drop further, providing an opportunity to refinance at even a lower rate.

A Great Deal: This is a buyer’s market. Most other buyers have disappeared since the tax credits on home purchases expired. Prices have come down as much as 30% since their peak depending on which part of the country you are looking in.

Large Inventory: Even though the glut of homes on the market has decreased over last year’s peak there are still more than plenty from which to choose. The National Association of Realtors puts the current inventory at around 4 million. There are more homes that continue to come on to the market too as banks slowly unload their inventory of properties providing more choices and great prices.

Tax Breaks: Not yet on the chopping block, you can deduct mortgage interest from your income taxes. Also you can deduct your real estate taxes and you may get a tax break on capital gains, if any, when you sell.

Experts have recommended that if you are staying for 5 or more years, buying becomes an increasingly better deal.  This allows you the time to recover any extra expenses incurred in closing costs and allows you time to benefit from price appreciation. If you are still questioning whether you should rent or buy check out The New York Time’s interactive calculator to crunch the numbers. This advanced calculator takes many factors into account from yearly costs to selling costs and broker’s fees.