Heading into 2015 many people have their sights set on buying a home. The personal reasons differ for each buyer, with many basic similarities. Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on thetop 5 financial benefitsof homeownership his paper -The Dream Lives On: the Future of Homeownership in America. Here are the five reasons, each followed by an excerpt from the study:
1.) Housing is typically the one leveraged investment available.
“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”
2.) You're paying for housing whether you own or rent.
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”
3.) Owning is usually a form of “forced savings”.
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”
4.) There are substantial tax benefits to owning.
“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”
5.) Owning is a hedge against inflation.
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”
We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.
Author:Dawn Borkowski Phone: 864-313-4608 Dated: January 21st 2015 Views: 441 About Dawn: ...
With approximately 50 years combined experience, Guest Group brings a wealth of varied experience in both Residential and Commercial Real Estate.
We are loyal, ethical and very dedicated to our clients. We give exceptional service and continue to have our clients for life. We compliment each other and understand the Real Estate Industry and the Local Market.
We have strong negotiating skills and transaction servicing that will ensure you of a successful real estate experience.
Wondering how the Real Estate Market is projected to perform in 2021?
Coralie is an awesome realtor she treat's you like a personal Friend she really goes above and beyond to help you find a House that's Right for you. Coralie was better to me than any other realtor I have worked with before. I would recommend Coralie to anyone Looking for a place to buy. I have already recommended her to my coworker. "