Aside from the personal and emotional reasons to buy a home, ther are also a number of financial reasons why owning a home is a great decision. In addition to exceptional home affordability and near historic low interest rates, here are some important financial benefits to owning a home.
Increased Net Worth: Few things have a greater impact on net worth than owning a home. The Federal Reserve Board of Consumer Finance Reports that homeowners have an average net worth of $184,400 compared to just $4,000 for renters.
Big Tax Deductions: One of the largest tax deductions available to anyone is the amount of interest paid on a mortgage. For example, a $150,000 home paid at an interest rate of 5.5% can add up to approximately $8,000 in interest paid. The applicable tax deduction amounts to a significant savings - effectively reducing the amount of a homeowner's monthly loan payment.
Long-Term Appreciation: Over the past couple of years, home prices have corrected and become more affordable in most parts of the country. That is great news for buyers. However, it has overshadowed the long-term appreciation of a regular home's value. The reality is, despite market ups and downs, real estate historically appreciates around 5-6% a year. Even taken at a conservative appreciation rate of 3%, a home purchased today for $150,000 should grow in value to $364,000 over 30 years.
$8000 Tax Credit: Im sure you haven't forgotten. The government is offering an $8000 tax credit for first time home buyers - or for folks that haven't owned a home during the past three years. The program is scheduled to end soon. Potential buyers must complete their first tme home purchases before December 1st to qualify for this special credit.
If you are considering purchasing a home, this is the ideal time. Call or email me today to discuss your specific situation and how you can benefit from today's market.
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