Most Americans prefer to live in their own home. Choosing the neighborhood we want and selecting a residence that will satisfy our lifestyle needs for years are major goals for most of us.
Enjoying the security and freedom of home ownership are the main benefits we should focus on when buying. Having these daily comforts is the primary reason Americans aspire to be homeowners.
Yet the advantages of owning don’t end there. Homeowners also tend to see their residence go up in value at a faster pace than the rate of inflation.
This trend has remained stable for generations in the U.S. Analysts say it’s because the value of the land under our homes keeps going up.
NO MORE LAND
America’s increasing population demands that we keep building properties in order for families to have a place to live. Yet our supply of buildable land is limited.
New homes often are constructed further out, forcing owners to make longer daily commutes. So it’s not surprising that existing owners find the values of their more-convenient homes to be on an upward slant.
Property prices dropped in recent years because they had risen so fast in the years preceding the crisis that home ownership became unaffordable for the average buyer. Real estate values had to fall so households could afford to purchase again.
Now we’re moving back towards a normal housing market. Today’s buyers are able to find attractive values, and also obtain great rates on a home loan.
How we finance home purchases offers the third big reason that owning makes sense. Yet perhaps it’s the least-recognized advantage of homeownership.
Today’s fixed-rate mortgage gained popularity in the 1930’s. It was developed as an answer to problems encountered during America’s Great Depression.
Monthly payments are calculated to remain stable over the loan’s life. Homeowners can easily budget their expenses, and know their housing costs won’t change.
Yet they also are paying off their loan over time. While a house is going up in value, the amount owed on it is falling.
This allows American homeowners to grow their wealth over time. Someone who stays in their house and simply makes monthly payments can retire without any housing expense. Today all the strongest reasons for purchasing your own place are as true as they’ve ever been.