Attaining The American Dream The 5 Financial Reasons To Buy

Attaining The American Dream The 5 Financial Reasons To Buy


Attaining The American Dream: The 5 Financial Reasons to Buy | Keeping Current MattersThe American Dream of homeownership is alive and well. Thepersonalreasons 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 thetop 5 financial benefitsof homeownership 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 there, contact me to help evaluate your ability to do so.


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Adam Moysaenko REALTOR / MBA
Exceeding Expectations

5700 Tennyson Pkwy Ste. 170 Plano, TX 75024
Direct: 972-757-7000 Office: 972-836-9295 Ext. 571 

 






content courtesy of keepingcurrentmatters.com


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Phone: 214-282-7340
Dated: May 11th 2015
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About Felicia: Felicia has been in the Real Estate profession for many years. She was born and raised in the DFW a...

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