The American Dream includes home ownership for many reasons, including educational, health, and social advantages. However, today we look at four of the top FINANCIAL advantages of New Jersey homeownership:
1. Buying is Cheaper Than Renting
The results of the latest Rent vs. Buy Report from Trulia demonstrate that home ownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States. The report reveals that:
“Interest rates have remained low, and even though home prices have appreciated around the country, they haven’t greatly outpaced rental appreciation…Nationally, rates would have to reach 9.1% for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.”
2. Home ownership “Forces” You to Save
According to SavingAdvice.com, home ownership forces saving:
“Home ownership is a “forced” savings account because you own the home, you have no choice – that monthly housing cost has got to be paid no matter what…Home ownership can be an outstanding way to force yourself to be more frugal in the rest of your spending so that you can save and build equity in your home.”
3. Home ownership Offers Several Tax Deductions
According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - several tax advantages to home ownership exist. The three top advantages?
Homeowners who itemize deductions likely reduce their taxable income by deducting any interest paid on a home mortgage.
Homeowners who itemize deductions often also reduce their taxable income by deducting property taxes they pay on their homes.
Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale.
4. Experts Expect Home Price Appreciation to Continue
Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts, and investment & market strategists about where they believe prices are headed over the next five years. They then average the projections of all 100+ experts into a single number. Over the next five years, home prices should appreciate 3.22% per year on average and grow by 17.3% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.
Money In Your Pocket
We believe that purchasing a New Jersey home now reflects sound financial decision-making. As Warren Buffet said, “When others are greedy, be fearful. When others are fearful, be greedy.” Questions regarding financial advantages to New Jersey home ownership? Give Team Nest Builder a call today---we’re here to help!