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The 5 Greatest Benefits of Homeownership

The 5 Greatest Benefits of Homeownership

Recently, Freddie Mac reported on the benefits of homeownership. According to their report, here are the five benefits that “should be at the top of everyone’s list.”

  1. Homeownership can help you build equity over time.
  2. Your monthly payments will remain stable.
  3. You may have some tax benefits.
  4. You can take pride in ownership.
  5. Homeownership improves your community.

Let’s expand on each of Freddie Mac’s points:

Homeownership can help you build equity over time.

Every three years, the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).

In a Forbes article, the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun reported that now the net worth gap is 45 times greater.

Your monthly payments will remain stable.

When you purchase a home with a fixed rate mortgage, the majority of the payment (principle and interest) remain constant. On the other hand, rents continue to skyrocket. Your housing expense is much more stable if you own instead of rent.

You may have some tax benefits.

According to the Tax Policy Center’s Briefing Book -“A citizen’s guide to the fascinating (though often complex) elements of the federal Tax System” – there are several tax advantages to homeownership.

Here are four items from the Briefing Book:

  • Mortgage Interest Deduction
  • Property Tax Deduction
  • Imputed Rent
  • Profits from Home Sale

You can take pride in ownership.

Most surveys show that a major factor in purchasing a home is the freedom you have to design the home the way you want. From paint colors to yard accessories, you don’t need a landlord’s permission to make the house feel like a home.

Homeownership improves your community.

The National Association of Realtors recently released a study titled ‘Social Benefits of Homeownership and Stable Housing.’ The study explained:

“Homeownership does create social capital and provide residents with a platform from which to connect and interact with neighbors…Owning a home means owning part of a neighborhood, and a homeowner’s feelings of commitment to the home can arouse feelings of commitment to the neighborhood, which, in turn, can produce interactions with neighbors.”

Bottom Line

There are many benefits to homeownership. That is why it is still a critical piece of the American Dream.

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6 replies
  1. Angela Waterford
    Angela Waterford says:

    I wasn’t aware that homeownership could help me build equity over time. Personally, I think I will buy a house from a real estate company if I may get some tax benefits from owning one. Since it will improve my community as well, I’m sure that my neighbors will love having a new addition to their community once I manage to buy a house. http://www.yourcoldwellbanker.com/

  2. Bob Newton
    Bob Newton says:

    It’s interesting that you point out that owning your own home comes with tax advantages. I’ve been trying to make smarter financial decisions for my family lately, so I’m considering buying a home for us. I’m going to search for a good real estate brokerage that can help me purchase a home.

  3. Caroline Scott
    Caroline Scott says:

    I definitely agree with this list of benefits that come with owning a home, I personally take pride in how my home looks as I made some home improvements and gave it my own touch to call it my own even if I bought it already built. These are the things that you won’t easily be able to do as a renter, the only thing that I miss about renting is that all things maintenance-related were taken care of by the landlord lol. Renting is not all that bad especially if you’re still unsure as to how long you’ll be staying in a place, however, nothing beats the feeling of building equity and stability that comes with being a homeowner in my opinion.

  4. Jay Ren
    Jay Ren says:

    That’s a good point you made about having a more stable monthly expense. It might be higher than rent in some cases, but not by too much, from what I understand. Having that stability can actually free up finances in a budget. If the price remains the same from month to month, you know how much give your budget actually has!

  5. rachel frampton
    rachel frampton says:

    My sister would like to buy a house this year, which is why she’s thinking of hiring an inspection service so she will be aware of the possible damages. Well, you made a pretty good point that she must educate herself about the property tax deduction. I guess we also share the same opinion that her monthly payments are stable.


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