Buying a house should not remain a dream. Individuals have to make that dream happen.
RE/MAX Alliance says that " the American Dream of Home-ownership is alive and well." But people, in general, will not stop hoping to own their house. Reasons may be different from one person to another, but in someways, there are some common grounds as to why each one wants to build or buy a house.
In the article, it has mentioned 5 financial reasons why one needs to buy a home. The information has been lifted from the paper (The Dream Lives On: the Future of Homeownership in America) of Managing Director of the Joint Center of Housing Studies Eric Belsky of Harvard University.
Number 1 reason why people need to buy is that "Housing is typically the one leveraged investment available." Owning a house makes the person appreciate the value of his/her house 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."
Number 2 reason, whether you rent or you buy a house, you are still paying for the housing you accommodate. The good choice in this situation is to rather pay for your housing that you will own in the long run.
Number 3 reason is related to number 2 in a way. Paying for your housing is like a "forced savings." The article says "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."
In a similar point of view about saving, BillySimons(dot)com has published an article stating that "with interest rates and home prices expected to climb in the next year, the financial penalties of delaying or forgoing a home purchase in today's market have become very steep."
This means that if you do not delay buying your house you are actually saving yourself some amount. This information is taken from the Opportunity Cost Report released by Realtor(dot)com. "The report estimates that, based on today's dollars, the average purchaser would accumulate $217,726 in increased wealth over a 30-year period."
Reason number 4, the home buyer will have substantial tax benefits to owning. How? The homeowner is given the right 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."
Last but not the least, the number 5 reason in owning a house is that it gives you a hedge against inflation. The paper says that "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."
So those are the top 5 financial reasons in buying a house. Those are actually more of benefits. If you have the money, and you can already afford it, why wait?
