10 Reasons To Buy a Home

Are you considering whether to take the leap into homeownership? From financial stability to personal fulfillment, the decision to buy a home is a significant milestone in anyone’s life. In this article, we’ll explore ten compelling reasons why purchasing a home could be one of the best decisions you’ll ever make. Whether you’re dreaming of your own space, building equity, or planting roots in a community, here are ten reasons why buying a home might be the right choice for you.

1. You can get a good deal.  This is a buyer’s market.  Most of the other buyers have now vanished, as the tax credits on purchases have just about expired.  We’re four to five years into the biggest housing bust in modern history.  Will prices fall further?  They could.  You’ll never catch the bottom.  It doesn’t matter so much in the long haul anyway.
   
2. Mortgages are cheap.  You can get a 30-year fixed loan for around 4.25%.  What’s not to like?  These are the lowest rates on record.  As recently as two years ago the rates were about 6.5%.  That drop slashes your monthly repayment by a fifth.  If inflation picks up, you likely won’t see these mortgage rates again in your lifetime.  And if we get deflation, and rates fall further, you can refinance if you qualify.
   
3. You’ll save on taxes.  You can deduct the mortgage interest from your income taxes.  You can deduct your real estate taxes.  And you’ll get a tax break on capital gains — if any — when you sell.  Sure, you’ll need to do your math.  You’ll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead.  The breaks are more valuable the more you earn, and the bigger your mortgage.  But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.
   
4. It’ll be yours.  You can have the kitchen and bathrooms you want.  You can move the walls, build an extension (zoning permitted), or paint everything bright orange.  Few landlords are so indulgent; for renters, these types of changes are often impossible.
   
5. You’ll get a better home.  In many parts of the country, it can be really hard to find a good rental.  Generally speaking, if you want the best home in the best neighborhood, you’re better off buying.
   
6. It offers some inflation protection.  No, it’s not perfect.  But studies suggest that over the long-term, housing has tended to beat inflation by a couple of percentage points a year.  That’s valuable inflation insurance, especially if you’re young and raising a family and thinking about the next 30 to 40 years.
   
7. It’s risk capital.  No, your home isn’t the stock market and you shouldn’t view it as the way to get rich.  But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again too.  One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities — for practical as well as psychological reasons.  Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy — if it happens — and still managing to sleep at night.
   
8. It’s forced savings.  If you can rent an apartment for $2,000 a month instead of buying one for $2,400 a month, renting may make sense.  But will you save that $400 for your future?  A lot of people won’t.  Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn’t a cost.  You’re just paying yourself by building equity.  As a forced monthly saving, it’s a good discipline.
   
9. There is a lot to choose from.  There is a glut of homes in most of the country.  The National Association of Realtors puts the current inventory at around 4 million homes.  That’s below last year’s peak, but well above typical levels, and enough for about a year’s worth of sales.  More keep coming onto the market too, as the banks slowly unload their inventory of unsold properties.  That means great choice, as wel as great prices.
   
10. Sooner or later, the market will clear.  Demand and supply will meet.  The population is forecast to grow by more than 1000 million people over the next 40 years.  That means maybe 40 million new households looking for homes.  Meanwhile, this housing glut will work itself out.  Many of the homes will be bought.  But many more will simply be destroyed — either deliberately, or by inaction.  This is already happening in certain areas of the United States, like Florida and Nevada.  Unless you live there, the glut won’t have any long-term impact on the housing supply in your town.