The Benefits of Home Ownership

by Mark Molchany

Still the American Dream!


2.5 kids and a home in the suburbs, the proverbial American Dream.  Well, there are a few excellent reasons for wanting to own your home that back this statement all the way.  The first, and in my opinion, the biggest is financial.  Forbes Magazine gives seven financial benefits of owning your home and first and foremost among the Realtor community is the Mortgage Interest Deduction.  The IRS allows homeowners to deduct interest paid on their mortgage to be deducted from their income.  This deduction can be quite a substantial deduction in the early years of a mortgage when most of your payment is going toward interest.  It seems every year there is a proposal in Congress to remove this from the tax code and every time it is on the table, the National Association of Realtors (NAR) fights to keep it.  Any time you make home ownership harder and costlier, fewer people will be able to afford to own a home. This will have negative effects on the American economy and economic growth.   Another tax advantage of owning your home is being able to deduct property taxes on your primary residence.  These benefits are strong motivators for people who rent to seriously considering purchasing a home.


Your home is like a savings account.  Every time you make a mortgage payment on your home, you bring down the principal of what you owe.  In the early years of a mortgage, only a small portion goes to the principle, and a larger portion goes to interest. However, over the years more and more will be going to the principle which will build valuable equity for the homeowner.  At the same time, your debt is going down, and your home should be appreciating, (going up in value).  This will increase the equity in your home even greater.  We can define equity as the amount your home is worth versus the amount owed on your home.   This equity could be used for future investments like a rental property or to pay down other debt you may have accumulated.  Essentially your home becomes a bank that you can use to borrow against.


One of the best parts of being a Realtor is helping a first time home buyer find their first home.  There is nothing like seeing the faces of a young couple, just starting out, receiving the keys to their new home.  The same could be said for a person who has rented their whole life and finally made the decision to own their first home.  They now have roots in the community.  Homeowners move far less than renters.  According to NAR’s Research Division, from 2010-2011 only 4.7 percent of owner-occupied residents moved as opposed to 26 percent of renters.  What this means for the community is that people who own their home stay in the community longer and make social ties.   There is a greater sense of belonging.  They will find themselves involved with community events, schools, local sports, and politics.  They believe the community they purchased and invested in will be a great place to raise a family, further entrenching them into the community.


People who own their home are less likely to be victims of crime because they have more financially to lose. A stable neighborhood promotes less crime. The educational achievements of children whose parents own their home are much higher than those who do not. The school dropout rate is lower, and so are the teenage pregnancy rates.  Studies also show that homeowners are happier and healthier because they have higher self-esteem and higher perceived control over their lives.

You can see why owning your home is the American dream.  It helps you to become a valuable member of the community.  It gives several tax benefits, putting money back in your pocket and is an excellent investment.  Owners are happier and healthier than renters.  Their children do better in school, and owners are less likely to be victims of a crime.

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