Although between 2008 and 2012 I heard some form of the phrase, "buying a house was the worst decision I ever made..." from homeowners that bought at the height of the market, owning a home has traditionally had some great financial benefits. Despite those benefits, many continue to rent!
In this blog, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.
“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option… as people get more savings in their pockets, buying becomes the better option.”
What proof exists that owning is financially better than renting?
1. The top 5 financial benefits of homeownership are:
- Homeownership is a form of forced savings.
- Homeownership provides tax savings.
- Homeownership allows you to lock in your monthly housing cost.
- Buying a home is cheaper than renting.
- No other investment lets you live inside of it.
2. Studies have shown a homeowner’s net worth is 44x greater than that of a renter.
3. A family that purchases an average-priced home at the beginning of 2018 could build more than $44,000 in family wealth over the next five years.
4. Some argue renting eliminates the cost of taxes and home repairs, but every renter must realize those expenses incurred by a landlord are already included into the rent payment– along with a hefty profit margin!!
I think this video explains the situation fairly well...
Owning a home has always been, and will always be, better from a financial standpoint than renting.