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There are many financial advantages of home ownership. Some of the major
benefits are:
PRICE APPRECIATION:
The increase in home value varies from year to year based upon economic conditions, but in general over the past 40 years home prices have steadily increased.
EQUITY APPRECIATION:
Equity is the difference between the value of your home and the balance of your mortgage. You build up equity by paying off your mortgage. Equity also increases as the value of the house appreciates. When you sell your house, you collect your equity in cash. Home equity is a valuable family asset-like money in the bank!
HEDGE AGAINST INFLATION:
A house is valuable to own especially during inflationary times. Inflation is the continual rise in prices. The dollar purchases less and less during an inflationary period. The barometer of inflationary increases is the federal Consumer Price Index (CPI) which is bases on some 400 goods and services gathered in over 50 cities. It is a barometer of inflation because if your income does not keep up with the rise in the index, then you fall behind in relations to what your money will buy. In other words, your real purchasing power has decreased. This is important for real estate investments because all goods do not inflate at the same rate. Home costs in general have been rising at a rate faster than the CPI.
TAX BENEFITS:
Real estate ownership gives many tax advantages. Contact a CPA to find out more about available tax advantages.
The financial benefits for owning a home are valuable. It makes good sense to own in today's market.
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