While much attention has been placed on the record number of young adults who are delaying homeownership, recent research from NAHB shows that 70% of Americans still believe that owning a home is an essential part of the American Dream. That is why the homebuilding industry celebrates National Homeownership Month in June.
The benefits of owning your own home are numerous — for you and for your community. You build financial strength and emotional well-being for you and your family, and at the same time, as a homeowner, you promote increased stability for the surrounding community.
Financial Benefits: Building equity and accruing wealth when the value of your home appreciates are among the longer-term financial benefits of homeownership. The home equity you build increases your net worth.
Also of importance to note is that long-term, buying is cheaper than renting. In some cases, it may be cheaper to rent, but over time, as the interest portion of your mortgage payment decreases, the interest that you pay will eventually be lower than the rent you would have been paying.
Once a year at tax time, you get a reminder of another advantage of owning a home.
American homeowners saw their tax bills trimmed by a total of more than $100 billion in 2017, according to estimates by the Joint Committee on Taxation and NAHB analysis. This includes both the mortgage interest deduction and the real estate tax deduction. On average, 70 percent of homeowners with a mortgage claim this deduction and 90 percent of all mortgage interest paid gets deducted, according to NAHB.
For those concerned about recent changes to federal tax codes for home ownership, most of the revisions shouldn’t affect the average homeowner. For example, unless you needing a mortgage for $750,000 or higher, you need not worry. Other changes to real estate deductions by the new tax laws can be offset by decreasing income-tax rates for many. Finally, the standard deduction is actually rising, which in some cases will help to offset the loss of itemized deduction cuts.
Quality-of-life Enhancements: Homeownership increases stability for you and for the community where you live. Homeowners are less likely than renters to move every year or two. Once you settle in, you make friends, get to know the neighbors and develop a sense of community — and that’s a motivation to help maintain a safe and thriving environment for you, your family and your neighbors.
If you value privacy, apartments and townhouses are poor choices for anyone who truly values their peace and quiet. You share parking lots, parking spaces, and common areas with your neighbors, and even thin walls in some cases. Owning a home means you have the freedom to landscape, rearrange, remodel and live the way that you choose (homeowner association restrictions notwithstanding.)
Finally, owning a home can be the ultimate family heirloom. Your home can be the “home-base” of children, grandchildren, extended family and friends over the years. The sentimental and monetary value of keeping a home in the same family is a perk that can’t be matched by any traditional heirlooms or prized possessions.
To learn more about the benefits of homeownership or find homeownership opportunities in your area, contact your local builders association at www.pabuilders.org/find-a pro or go to www.nahb.org.