5 Benefits of Buying a Home
Interest rates are only one factor when it comes to buying a house now.
Interest rates sure do get a lot of attention. But they shouldn’t be the only part of your home-buying decision-making process. After all, the answer to the question “Is right now a good time to buy a house” boils down to whether the time is right for you: To start your new chapter. Invest in what makes you happy. Interest rates don’t negate the benefits of buying a home. Unlike that other big-ticket purchase — a car — home value doesn’t take a nose dive once you get the keys. Quite the opposite.
Is Owning a Home a Good Investment?
- Benefit #1: Long-term Financial Growth – When it comes to long-term, stable financial growth, real estate is your ace in the hole. If you bought a home 30 years ago for the median price at the time — about $105,900 — that same home would have appreciated by almost $280,000 in 2022 to about $384,900, according to the National Association of REALTORS®. Even factoring in the lowest point for the market in recent memory — the Great Recession — home values have risen over time, and have kept pace with inflation.
- Benefit #2: Building Equity – The down payment and the principal in your monthly mortgage payment go straight to your equity. Rent money just goes. That equity, an interest percentage in the home, gives you a lot of flexibility. You can:
- Trade up to your next home when the time is right;
- Tap equity to borrow money to pay for home repairs and renovations (making your home even more valuable!); or
- Use it to consolidate credit card debt or even help pay for college. (Just keep in mind when you use equity, your home becomes your collateral.)
Thanks to equity, the typical net worth of homeowners is $300,000 compared with $8,000 for renters, according to 2022 NAR data. That’s a lot of financial leverage.
- Benefit #3 – Tax Savings – Believe it or not, savings and taxes can play together nicely. Equity is savings, and when you sell a primary residence, you don’t typically pay taxes on the gain. You can take up to $250,000 ($500,000 for a married couple) without owing taxes. So all that appreciation goes with you on your next adventure. to equity, the typical net worth of homeowners is $300,000 compared with $8,000 for renters, according to 2022 NAR data. That’s a lot of financial leverage.
- Benefit #4 – Deduction of Property Costs – If you itemize, you also can deduct some of your property costs from your federal taxes. Those include the annual interest you pay on your mortgage, your state and local property taxes up to $10,000, and in the year you buy, some of the fees you paid to close on the home. Only itemize if it means you can claim more than the standard deduction, which for tax year 2022 is $12,950 for single filers and $25,900 for married couples.
- Benefit #5 – Remodeling Your Dream Home – One of the biggest pros of owning a home is that you can turn the house you can afford into your dream home – bit by bit. Those holes in the wall and paint colors your landlord freaked out about? No worries. You can upgrade amenities, décor, and style to your vision — whether that’s cottagecore, Barbiecore, or anything in between.
- Bonus Benefit – Work with a REALTOR® – You don’t have to go through the buying, or selling, process alone. A REALTOR®, an agent who’s a member of the National Association of REALTORS® and subscribes to its code of ethics, has the expertise to help you assess the market; expand and reframe your home search into areas you might not have thought of; refer you to reliable lenders; and guide you through the offer, negotiations, and closing.
When you’re ready to buy or sell your South Carolina Lakes homes, we’re here to help you get it done right.