WHY BUY?

Owning your own home offers many benefits ranging from increased stability
and security to investment and tax advantages.

Most homeowners find satisfaction and pride in owning their own home.

A NAR survey revealed that almost 70% of homeowners and renters found
avoiding rent to be an important reason to buy a home. Renting offers no
equity, no tax benefit, and no protection from regular rent increases; it's like
watching your hard-earned money float away. Think for a moment: if you're
now paying $600 per month for rent ($7200 per year) and your rent
increases by 6 percent a year, that means that next year you'll be paying
$7632, in five years you'll be paying $9054, and in ten years you'll be paying
$12,164. After ten years, you will have spent $94,856 on rent and have
nothing to show for it.

Buying A Home You Can Afford Is Generally A Wise Financial Choice.
  • Unlike renting, homeownership also offers the advantages of increasing
    equity on your investment. Homeownership always has been, and
    continues to be, the single largest source of savings for American
    households. Homeowners build equity and can borrow against it.
  • Compared to the alternative of renting while investing in stocks, buying
    a home wins over the long term. Consider this example: Two identical
    families have $16,800 to invest. Family A uses the money for a down
    payment on a $140,000 home while Family B invests in stocks and
    rents a comparable home for $750 per month, initially. After 10 years,
    the family that invested in a home is $34,660 ahead of the family that
    invested in stocks. Furthermore, the homeowner has paid about $5000
    less for housing than the renter over the 10-year period. (Based on
    national averages for home and stock market appreciation and taxes
    paid).
  • Homeownership also carries significant tax benefits since property
    taxes and the interest paid on a mortgage are tax deductible. Profits
    earned on other investments are subject to a 20 percent federal tax
    rate for most investors.
  • Compared to other alternatives, a home is a relatively stable
    investment.
  • Homes tend to steadily increase in value while other investments may
    be extremely volatile. For example, over the past 28 years, average
    stock values have increased by as much as 35 percent in one year and
    dropped by as much as 24 percent. The average annual increase in the
    New York Stock Exchange Price Index was 6.9 percent from 1969 to
    1996. Average stock prices dropped in 8 of those 28 years. During the
    same 28 years, while home values experienced ups and downs in
    individual housing markets, they remained stable and reliable nationally,
    averaging a 6.5 percent increase each year. The largest annual increase
    in the price of existing homes was 14 percent; the smallest, 2 percent.
  • Over time, the return on your investment in your home can be
    substantial. For example, a new home purchased in 1977 for $48,800
    (the median price for new homes at that time) was worth $150,707 in
    1997. Assuming that values continue to increase at the same rate, the
    home will be worth $264,844 in 2007. (This example is based on
    national statistics; appreciation rates and economic conditions vary in
    individual housing markets.)
  • Additionally, the rate of return on a home is much greater than that of
    other options. A stock investor, for example, must pay the entire
    purchase price up front, while a homebuyer invests only the amount of
    the down payment. If a buyer invests $10,000 in a down payment on a
    $100,000 home, and the home's value increases by $5000 the first
    year, then the buyer has realized a 50 percent return on his
    investment.
  • Finally, once you own a home and have built up some equity, it is
    easier to move up to a larger and/or nicer home-but you have to start
    somewhere. Buying a home is a good investment in your future.
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