Homeownership has been a long-standing icon of the American dream. However, since the Great Recession of 2008, the number of renting households has steadily increased. As of the last report from the U.S. Census Bureau, owner-occupied housing is at 55.5 percent while renter-occupied housing is at 31.8 percent. Even so, the dream of homeownership is still very much alive. And, thanks to attractive loan programs, it’s more possible than many people realize. Not only that, but there are some very definite advantages to homeownership.
Long-Term Cost Benefit
According to Bloomberg, it’s more cost-effective to buy than to rent, even in high-priced markets. Most people see the down payment, closing costs, property taxes, and maintenance costs as overwhelming expenses, but even in tougher markets, those expenses will be lower than the long-term financial cost of renting. Think about it, when you’re renting a home, you’re paying someone else’s mortgage, plus providing a little income for them. They’re not in the real estate business to break even, they’re in it to make a profit.
A Steady Monthly Payment
Even as renting has increased, so have the rental rates. When you lock in a mortgage rate, you will pay the same rate for 30 years, unless you refinance your loan at some point. Your monthly payment will stay the same too.
Tax Write-Offs
Homeowners can take advantage of some fabulous tax write-offs. Mortgage interest is deductible for mortgages up to $1,000,000 (or $500,000 for those who are married but filing separately). Property taxes are also deductible. According to Realtor.com, homeowners save an average of $3,000 a year from these two deductions, but the deductions don’t stop there. Homeowners can cash in on tax write-offs for private mortgage insurance, medical improvements, home office deductions, energy-efficiency credits, and more.
Privacy
When you own a home, there is no landlord or property management service monitoring the condition of your home and grounds. What you do with your property is your choice (unless you live in a housing community governed by a homeowner association). But nobody will be walking through your home to see how you’ve kept it up, or evicting you if you decide to have a Great Dane as a pet. Not only that, but homeowners tend to have more options for creating privacy from neighbors.
Equity
A list of advantages is not complete without mentioning home equity. When you own a home, it’s not only the place where you live, but it also doubles as an investment. Home equity grows as you pay your mortgage, since it’s based on the amount that you’ve paid on the actual principal. Once you’ve built up equity, you can use it to make home improvements or even to live off during your retirement years.
Buying a home is still a good idea. If you’re in the market for a home, talk to your local mortgage lender. You just might be surprised how affordable it is for you to make the leap from renting to buying.