Making the determination to rent or buy will always require a close evaluation of your personal circumstances. Lately, the economy and high unemployment rate have only made it more complex for many families. And that's in spite of historically low mortgage rates.
Many are reconsidering homeownership as a lifetime goal and no longer consider renting a taboo. But owning a home is a mainstay of the American dream that offers numerous benefits to the homeowner.
Here are two reasons why I always believe owning is superior to renting, if you are in the financial situation to choose, of course.
Homeownership is a good investment.
Home prices over the long term often pay off. The average value of a home in the Boston area, for example, is 50 percent greater than it was in January 2000. That's even though prices have fallen in more recent years.
Appreciation is all about timing. If you buy low and sell high, then it is a good investment but you should not consider homeownership solely on whether or not you will be able to sell at a profit. It is likely you will not be able to predict where the housing market will be when you want to or have to sell.
A home is a good way to save money.
Part of every mortgage payment goes to paying back the principal of the loan and building a little more home equity. So, a homeowner is using a house as a piggy bank. What's more, not all of the mortgage interest paid is lost because it reduces a homeowner's taxable income.
Although, to be fair, the cost of owning a home is more than just the mortgage payment. Homeowners must pay for maintenance and repairs, expenses that renters don't have.
I cannot stress enough how much I love my own home and how I wish for everyone to acheive that American dream. But if the time calls for renting, then there is no question. Just keep homeownership as a goal.
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