5 Financial Reasons to Purchase A Home

Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University discussed the top 5 financial benefits of homeownership in his paper that he wrote last year.

Here are the five reasons to buy a home from the study:

1) Housing is generally the one leveraged investment available.

Few households are interested in borrowing money to purchase bonds and stocks. Few lenders are willing to give them the money to borrow. As a result, owning a home allows families to boost any appreciation on the value of their homes by a leverage factor.

2) People are paying for housing whether they own or rent.

Homeowners pay debt service to pay down their own principal while individuals that rent pay down the principal of a landlord.

3) Owning a home is usually a form of "forced savings".

Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.

4) There are substantial tax benefits to owning a home.

Homeowners are able to deduct mortgage interest and property taxes from income.

5) Owning a home is a restriction against inflation.

Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning a home appealing. Reference:

http://www.keepingcurrentmatters.com/…/5-financial-reasons…/