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5 Reasons Why You Should Buy a Home Today

Homeownership almost seems like a dirty word in today’s society. People are blogging, tweeting and facebooking their belief that buying a home is just plain stupid. I respect their opinion on the issue though I totally disagree. Why?

This might be the best time to buy a home in American real estate history.

Some might think I’m crazy. Cynics might think that I am saying this because I still hold a real estate license (though I have not listed nor sold a home in ten years). My reason for saying it is actually quite simple. Owning a home makes more sense than not owning a home for the vast majority of families in this country. Let me give you five reasons why.

1. Real Estate is a Great Long Term Investment

Don’t take my word on this. This is what Mike Mandel, former chief economist at BusinessWeek and current Senior Fellow at Wharton’s Mack Center for Technological Innovation, had to say:

We’ve just had the biggest boom and bust in real estate in recent history. Nevertheless, real estate has still greatly outperformed the stock market over the past ten years.

Below is his chart actually showing the difference between real estate and the stock market.

2. A Home Is a Better Place to Raise a Family

Don’t take my word on this. When Fannie Mae asked current renters for the major reason to buy a house in their National Housing Survey 2010, these were the answers renters gave (they could pick multiple answers):

  • 78% said it was a good place to raise children
  • 75% said because they would feel safe
  • 70% said because you have control of your own space

3. A Home Creates a Sense of Community

Don’t take my word on this. The Federal Reserve Bank of New York just published a paper The Homeownership Gap. The paper explained:

Because owners have a financial interest in their property, they have incentives to take measures that will maintain or increase the value of that property. Some of these measures—such as fixing a leaky roof—are closely related to the house itself. Others, such as investing resources in the betterment of the neighborhood and the community, have broader beneficial effects on the local area, creating what economists call “positive externalities.”

4. It’s Cheaper to Own Than Rent in Many Parts of the Country

Don’t take my word on this. Housing Wire just reported on a Credit Suisse study:

While a segment of the renting population continues to rent, many are looking to dip their toes in the homeownership waters. Credit Suisse said the percentage of median household income needed to pay the mortgage on a median priced home is at a 30-year low… Low mortgage rates and property values makes homeownership more attractive than renting for many. In many markets — including Washington DC, California’s Inland Empire, Las Vegas and Phoenix — paying for a mortgage is less expensive than renting.

And here is a graph from the study:

5. The People Who Do Buy a Home Don’t Regret It

Don’t take my word on this. Probably the best people to ask if buying a home makes sense are the people who currently own homes. A recent national poll commissioned by Bankrate.com found:

Ninety percent of homeowners say they don’t regret buying their home despite a nationwide tsunami of foreclosures, short sales and loan modifications.

It’s a great long term investment. It’s a great place to raise a family. It gives you a greater sense of community. It’s less expensive than renting. People who currently own have no regrets. Buying a home seems like a no brainer to me.

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17 replies
  1. Jim Dahle, LW Reedy Real Estate
    Jim Dahle, LW Reedy Real Estate says:

    Steve, you’re the best. I’m building a float now so I can be part of the ticker tape parade for you, wherever it is. Keep up your calling of adding helium to everybody’s day.

    Jim Dahle

    Reply
  2. Millie Thomas
    Millie Thomas says:

    Great Advice! I have never been unhappy that I bought my home. Also, the investment homes that I bought have appreciated over the years and I have found that these investments far exceed putting money in the bank or into the stock market. Also, the homes that I have invested in can be used for vacation if not rented, for retirement or, if I’ve owned them long enough, I can refinance them for extra cash if needed.

    Reply
  3. Peggy LoScalzo
    Peggy LoScalzo says:

    Great articles! I have owned 3 homes and land and in each case the homes increased in value and the prophet was great. I was able to put 3 children thru college and I believe in the long run owning a home is the greatest investment anyone can make.

    Reply
  4. Cheryl Talbot
    Cheryl Talbot says:

    Buying a home will always be the best investment any of us will make in our lifetimes. Having that one place you can call home. There will never be anything more important than knowing each of us has a place of our own. The American Dream makes it possible. Thank you for encouraging each of us to seek out those individuals who understand the meaning of not only a home but an investment.

    Reply
  5. Faye Wilson
    Faye Wilson says:

    Great article! We purchased our first home over 30 years ago. Looking back, we didn’t realize then what a great investment it was in us! Just sold a home to a buyer who will pay less in mortgage payments than she was paying in rent.
    What a great time to “get off the fence” and start investing in you! If you can buy a home, you should!
    Thanks again for your article!

    Reply
  6. kevin westerlund
    kevin westerlund says:

    I would say I agree but some people who would like to buy a home like me cannot because of being on disability hard to buy a house on this income especially with credit problems great article though.

    Reply
  7. Roger Middleton
    Roger Middleton says:

    My wife and I have been thinking about moving out of our condo and purchasing a house but she’s not completely sold on the idea of buying a house. I liked the statistic that Fannie Mae had offered where 78% had said that a home would be better to raise children. I’ll mention this to my wife because we’re going to be starting a family soon and I know that if most people believe it’s a great place to raise children I’ll be able to convince her.

    Reply

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  1. […] have been posting on the financial advantages and the other non-financial benefits of homeownership for over a year. We must admit that, at times, we felt very lonely. It now seems […]

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