Often called the cornerstone of the American Dream, home ownership has always been an important milestone of adulthood. The recession of 2008 resulted in a record number of foreclosures. Three million Americans foreclosed upon their home in 2008, an 81 percent increase from the previous year and a 225 percent increase from 2006. The post-recession economic climate (among other factors) has contributed to the delay of younger Americans becoming first-time homeowners. Despite the delay, Millenials still view owning as a superior option to renting. According to a TD Bank survey of 18-34-year-olds, 84 percent of those surveyed cited a desire to become a homeowner. Half of the respondents referred to purchasing property as “a vital component of the American Dream.”
Do you have mixed feelings about buying a home right now? VA Home Loan Centers has compiled a list of ten reasons why owning a home is still a solid investment.
1. House prices tend to rise over time; a home purchase is one of the best investments you can make.
We’re four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30 percent to 50 percent (certain areas) from their peak. Home prices in the U.S have risen 3 percent to 6 percent a year for the past 20 years, and that trend is likely to continue. If you buy a home now, you’ve put your capital in a safe long term investment where it’s likely to grow.
2. You’ll pay less tax and save money.
You can deduct the interest you pay on your mortgage from your taxable income. New homeowners with recent home loans tend to get the greatest tax benefit. The newer the mortgage, the higher the interest payment each month that means greater tax breaks. Real estate taxes are deductible, providing great benefits to the homeowner. Homeowners often find that owning a home costs substantially less than renting a home.
3. Sell your home when you please.
Sell your home and avoid paying capital gains tax. After selling, you can upgrade into a larger home.
4. The home will be yours.
Do what you want with the home. Paint it purple, have black carpet, punch a hole in the wall. These types of changes are often impossible when renting but when you own a home, you can design it as you please
5. Interest rates are currently low.
This means that home loans are currently extremely cheap! In some areas, your mortgage payment could be less than your rent!
6. You’ll have the peace of mind of owning your own home.
No more worrying about crazy landlords or rent increases, you’ll be able to live in your home for as long as you like, and have a fixed payment each month for 30 years! No more unwelcomed surprises!
7. Its forced savings.
A portion of your payment each month will go to the principal of the loan. This shouldn’t be considered a cost but a savings plan. You’re just paying yourself by building equity. This will be extremely useful when you’re ready to retire.
8. Pride of ownership.
Owning your own home gives the owner and their family a sense of security and stability.
9. Have as many pets as you want.
Love your pets? Homeowners can relax and enjoy their pets without worrying about landlords!
10. It’s a buyer’s market.
No need for you to settle for anything less than the house of your dreams.