The housing market is crazy right now. Inventory is at an all- time low. It can be tempting to avoid the chaos and continue renting. However, here are a few reasons why owning a home is a good investment.
Appreciation in Value
The good thing about the housing market is that you can count on your home appreciating over time. Home values have risen over 30% in the last 5 years alone. That equates to money in your pocket if you’re a homeowner! The best part? You don’t even have to do anything to make your home worth more. You simply have to let the market do its’ thing.
Tax deductions are a huge bonus to owning a home. An article written by Jim Probasco for investopedia.com explains, “After appreciation, the benefit of home-ownership that is cited most often is tax deductions or savings. When you buy a home, you can deduct some of the expenses of owning that home from the taxes you pay to the government. Interest on home-equity loans, or home-equity lines of credit (HELOC), is also deductible if the funds are used to improve your home substantially. You can also deduct as much as $10,000 in state and local (SALT) taxes, including property taxes.” None of these deductions are available to renters. It’s a great incentive to buying a home.
Building wealth is one of the biggest reasons home ownership is a good investment. Through appreciation and equity, home ownership is a huge opportunity to increase your net worth. As previously mentioned, your home appreciating will ultimately put more money into your pocket. Equity is another way to build wealth. It’s the work you put into improving your property. If you buy a house, fix it up and sell it for more money down the road, those improvements will equate to a profit at the end of the day. Taking pride in your home definitely pays off!
Owning a home has the potential to provide you with financial stability. How is this possible? An article written for rocketmortgage.com states, “For many people, owning a home leads to greater financial stability. Over time, your housing costs become more predictable than what you’ll pay as a renter. And studies have shown that homeowners often experience greater mental well-being than renters. For instance, homeowners are more likely to engage in their community and become friends with many of their neighbors.”
Your Own Space
Having your own space doesn’t make much of a financial difference, but it’s a great mental health investment. Renting can feel really limiting. Waiting around for your landlord’s approval to fix something or make a cosmetic change is frustrating. Having your own space, and being able to change or adjust things as you see fit is powerful.
Owning a home is a fantastic investment in your future. The benefits of making this large purchase are worth braving the housing market.