Just two years ago much of the U.S. was in the throes of a raging sellers' market with many homes selling in 30 days or less. Today, this frenzy has been replaced with the relative tranquility of a housing market and it is now it is safe to say we are in a buyer's market with low interest rate and a large inventory of homes to choose from.
Although it is important to consider what is going to happen in the marketplace - it would not be prudent to make such a large investment without at least considering it - there are a number of good reasons why home buying can make good economical sense regardless of the housing market.
Homeowners build equity in their homes that can be used as collateral for a home equity loan, or as part of a retirement plan when you finally downgrade into a smaller home.
Built up home equity can also be used for putting money down toward your next home.
Prolonged home ownerships brings with it equity growth in the form of debt reduction and general inflation.
Even if the market starts declining, history tells us that this will only be short-lived, and the market will start increasing again.
By using your income to pay off your mortgage, your income is in effect working for you. The opposite is true with renting.
One of the biggest benefits to having a mortgage is that, in most cases, the interest portion of your mortgage payment is tax deductible, which can save you a lot of money every year.
Making the decision to invest in such a way is never going to be easy, but by looking sensibly at the market, and by really considering whether the advantages espoused above apply to your specific situation, you are able to make a more informed and reasoned decision.
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