A recent cover of Time Magazine featured the phrase, "Rethinking Homeownership" and dwelled on the downside of owning a home since we have been through some turbulent times.
This is doom and gloom of the worse kind. A home may not be the ultimate piggy bank that it once was, but does that mean we should become a nation of renters?
Before we turn in our welcome mats and put away the "Home Sweet Home" plaques we may want to look at the opportunity that is here and the reasons to buy a home right now.
- Quality of Life. A rental property is not going to give you the standard of living that home ownership will. Have you looked for a rental lately? Regardless of the location you are in, you will not find the same quality as in a purchased home.
- There are deals to be had. Yes, it difficult to sell a home right now - and that makes is easy to buy one. Many buyers have left with the tax credit expiration so the competition is not great for all of the houses that are languishing on the market. Take your pick. Prices are low.
- Loans are inexpensive. As recently as two years ago interest rates were over 6%. They are now in the low 4's. That is unprecedented.
- Tax Savings - You still have the mortgage interest deduction and can also deduct your real estate taxes. If you sell, you will get a tax break on your capital gains. All these items together make buying a much better deal than renting.
- It is a forced savings account. You may end up renting an apartment for a bit less than it would cost to buy a home, but that money is still going out the proverbial window. With your mortgage payment you are putting that money towards equity that will be there for you when you retire or decide to sell.
- There is a lot to choose from right now. With a glut of unsold homes, inventory is well above average levels. This means low prices as well as great choices.
- Pride of Ownership and Stability. You can decorate the kitchens and bathrooms exactly the way that you want them to be. Create an addition. Finish the basement. It's yours!
It was once said that homeownership could "change the very physical, mental and moral fiber of one's own children." Studies have shown that homeownership creates social stability and safer neighborhoods. There is also the fact that children actually do better in school when their families own the homes they live in.
None of this has changed.
So, is this still a good time to own a home? Absolutely!
Copyright 2010 "In This Day and Age - What Good is Owning a Home?"
Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230