Harvard: Why Owning A Home Makes Sense Financially

Real Estate Agent with KW Elite

     There are so many advantages to Home Ownership. This post outlines the Top 5 reasons to

own your personal residence . Additionally your personal residence will most likely be Free & Clear

as you reach retirement . That alone will provide with a number of interesting options that renters

just won't have ! Call me to be set up on an emailed Daily Search of available homes .

Original content by Sylvia Albers SL3230490

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own differ for each buyer, with many basic similarities.

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership in his paper -The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study: 

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” 

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

Posted by


Michael J. Perry




1280 Plaza Blvd. , Lancaster, PA 17601

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Comments (6)

Linda Guess
Keller Williams Tri-Lakes Branson, MO - Branson, MO
Branson area real estate sales.

When I was young I figured out that purchasing real estate was a forced savings.  So I bought more than one.  Good blog.

Feb 28, 2016 08:57 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Michael J. Perry ,

What a great choice of a post to re-blog. I have not seen it..thanks for bringing it to our attention.

Feb 28, 2016 09:13 PM
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

In my home area it can cast as much as 1/3 les per month to won a home than to rent

Feb 29, 2016 06:44 AM
Roy Kelley
Retired - Gaithersburg, MD

This is an excellent reblog selection and very good information to share with prospective home buyers.

Mar 03, 2016 10:07 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

This post (reblog) has over 475 views to date !

Feb 12, 2017 08:17 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Had to read this again 

Jan 10, 2021 11:42 AM