The Financial Benefits of Home Ownership

Mortgage rates have hit new record lows 11 times in 2020, according to The Mortgage Reports. If you are ready to buy, it’s a fantastic time to lock in.

And while a low mortgage interest rate is a great reason to start your home buying journey, there are multiple financial benefits to home ownership. “Owning a home is a great way to build your long-term wealth,” says Julia Daglistanli, a sales associate at ERA Justin Realty. “Instead of paying your landlord, you are paying toward your own investment.”

According to a report by Trulia, buying is cheaper than renting in 100 of the largest metro areas by an average of 37.4%. And while that alone may have you thinking about buying a home instead of signing another lease extension, there are many other reasons to buy versus renting.  

Here are four more reasons why owning a home makes financial sense:

Mortgage payments can be fixed while rents go up. $485.6 billion was spent on rents in the U.S. in 2017, representing an increase of over $4.9 billion from the year before. What’s more, rents have increased consistently over the last 20+ years.

Equity in your home can be a financial resource later. “The equity built in your home can be borrowed against in the form of a home equity loan or home equity line of credit,” Julia explains. “Simply put, a home equity loan is essentially a ‘second mortgage’ that uses your home as collateral as you borrow an exact amount of money.”

A mortgage can act as a forced savings account. Each month, your housing payments go toward owning your home instead of renting it; building your personal wealth and assets instead of someone else’s.

Overall, homeowners can enjoy greater wealth growth than renters. According to the latest data from the Federal Reserve, a homeowner’s net worth is 44.5 times greater than that of a renter ($231,400 vs. $5,200).

If you’re interested in learning more about how home ownership may benefit you,  call Julia or one of the other sales professionals at ERA Justin Realty at 201.939.7500.