5 Reasons Buying a Home Is Best for Your Finances

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5 Reasons Buying a Home Is Best for Your Finances

It has been reported for quite some time that the American Dream of buying a home is within reach for many buyers. The reasons behind why each homeowner dreams of buying may be different, but there are some commonalities.

Harvard University’s Managing Director of the Joint Center of Housing Studies (JCHS), Eric Belsky, wrote a paper entitled: “The Dream Lives On: The Future of Homeownership in America”. The piece touches on 5 important financial reasons why buying a home is a great idea.

The 5 reasons pointed out in the study include:

1. Housing does have a leverage factor

“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 pay for housing regardless of renting or owning

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3. Homeownership is a version 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.”

5 Reasons Buying a Home Is Best for Your Finances
4. Buying a home has its tax benefits

“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. Homeownership is a shield over 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.” 

Bottom Line

This study helps to acknowledge that homeownership or buying a home is a great opportunity for many Americans hoping to fulfill their American Dream. Are you ready for yours? We would love to discuss the opportunities awaiting you! Call us now at 704.997.3794 or send us a message here to connect with us at Showcase Realty.

Have you been eyeing one of our properties? If you are thinking of buying a home in the Dilworth area check out our Dilworth Homes for Sale! And be sure to check out these helpful buying tips to make your homeowner journey a success in Charlotte, North Carolina!

If you decide you don’t like your home we will sell it for free. *some conditions apply*

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