Harvard: 5 Financial Reasons To Buy Homes For Sale

iStock_000006637619XSmallEric Belsky is the Managing Director of the Joint Center of Housing Studies at Harvard University and currently serves on the editorial board of the Journal of Housing Research and Housing Policy Debate. The Dream Lives On: the Future of Homeownership in America is a new paper on homeownership that Belsky wrote this year. In his paper, he uncovers five financial reasons people should consider buying a home.

Here are the five financial reasons:

1. Housing is normally one of the only leveraged investments available. Very few people are not interested in borrowing money to buy stocks and lenders are not too willing to lend them money.

As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2. Whether you rent or own, YOU are paying for you housing. According to the paper,“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” All the more reason to buy one of the beautiful homes in Chesterfield, VA!

3. Owning a home can help to form better saving habits by forcing you to save. People can overcome the tendency to not want to save simply because they know they will have to make their house payment one way or another.

4. There are many benefits to owning a home but one of the top are the substantial tax benefits. As a homeowner you are able to deduct your mortgage interest and property taxes from your income.

”On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5. Owning a home is a hedge against inflation. Owning a home like one of the homes in Chesterfield, VA can be very attractive as housing costs increase at or higher than the rate of inflation over time.

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