Some people say it’s better to rent than buy a home right now. But there are still many good reasons to become a homeowner. The question is how does owing a home builds wealth? Owning a home is a smart investment that can help your money grow over time and increase your wealth.
Homeownership Builds Wealth Regardless of Income Level
Homeownership is a way to build wealth, no matter how much money you make. Even people with different incomes who own a home usually have more money than those who rent. Data from First American helps illustrate this point (see graph below):
What makes wealth so much higher for homeowners? A recent article from Realtor.com says:
This happens because when you own a home, you build something called “equity,” which is like a savings account. As you pay off your loan and the value of your home goes up, your equity increases. These are a great way to save money and build wealth. Renters do not experience an increase in wealth when home prices rise.
This is in contrast to homeowners, as stated by Mark Fleming, the Chief Economist at First American, during a recent podcast. Instead, landlords profit from the increase in property value.
Economist Mark Fleming explains in a podcast that higher home prices do not financially benefit renters. He states, “As non-homeowners, renters do not reap any wealth benefits from increasing home prices. This wealth, in fact, accumulates to the landlord.”
If you rent, you don’t get the same benefits. When home prices rise, the landlord gets richer, not you. So, owning a home can be a better choice than renting.
Apart from the potential for appreciation in the home’s value, owning a home also offers certain financial advantages. If you own a home, you might be eligible for tax deductions that can lower your taxes and save you money.
Before you decide to rent again, think about whether it might be better for you to buy a home instead.
Talk to a real estate expert you trust to help you decide what’s best for you. Buying a home can be a great way to start building wealth, no matter how much money you make.Owning a home has benefits like tax deductions, potential value increase, and the opportunity to build wealth over time. It’s a smart move for anyone, regardless of their income level.
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Bottom Line
If you’re not sure if you should rent or buy a home, remember that owning a home, no matter how much money you have, can help you become richer. Let’s talk now to begin the journey to owning your own home.
Find out why Kaya Homes is the leader in Long Island Real Estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, East Rockaway, Woodmere, Cedarhurst, Baldwin, North Woodmere, Woodsburgh, Hewlett Neck Hewlett Harbor, Bellmore, Wantagh, Merrick and Freeport area.
Fri, 28 Jul 2023 23:49:41 +0000
