On the Fence About Purchasing a Home – Now What?
Along with new promising resolutions of becoming physically fit, spending more time with the family and ramping up work performance, one of your resolutions may be to take the plunge into homeownership and bid your final farewell to your landlord. If you’re on the fence, it’s important to recognize that in addition to reaping the significant tax and financial benefits associated with homeownership, studies reveal owning a home may actually be good for your health.
The “rent vs. buy” debate is potentially the most prevalent discussion topic in real estate and certainly one of the most talked about discussions in financial circles, regularly making its way onto the front page of newspaper’s finance sections and Internet headlines. The age-old debate consists of the landlord luxury and seemingly affordable world of renting in one corner versus the significant personal and financial benefits of homeownership in the other corner.
Though the decision to buy or rent is undoubtedly a personal decision that depends on a host of factors, consider these powerful facts if you’re on the fence about taking the exciting and rewarding plunge into homeownership.
It is 45 percent cheaper to buy in Atlanta
Based on an average target monthly rent, home price, length of time living in a residence and income tax rate, Trulia figures it is an astounding 45 percent cheaper to buy rather than rent in Atlanta. The numbers for many other cities are not much different. It’s 44 percent cheaper to buy in Charlotte, 48 percent cheaper in Nashville and 51 percent cheaper in Dallas.
Short and Long-Term Social and Financial Benefits
Aside from the resounding tax benefits and long-term tangible financial advantages created by rising home prices and bankable equity, homeownership also heralds deep social benefits. According to the National Association of Realtors, the decision to stay in school by teenagers is higher among those raised by homeowner parents, and teenagers in these homes have a lower incidence of teen pregnancy. The study also revealed homeowners are typically more satisfied with their own personal situation than renters and they enjoy better physical and psychological health.
Though, of course, the factors for these outcomes are wide, experts believe a stable housing environment (less frequent residential change) and favorable neighborhood characteristics, such as a sense of community within the neighborhood, do play a part in these social benefits. The NAR also reports for “children growing up in families with incomes less than 150 percent of the federal poverty line, homeownership raises educational attainment, earnings and welfare independence in young adulthood.” Other studies prove people who live in an owned home have a higher quality of life, children have higher levels of achievement in math and reading, and fewer children suffer from behavioral problems.
Millennials, in fact, do want homes
Many millennials continue to be on the fence about homeownership due in part to the misconception their counterparts are holding off on purchasing a home. Despite the preconceived notions about millennials and homeownership, National Mortgage Professional Magazine provided these convincing statistics:
- In November 2015, the Fannie Mae Home Purchase Sentiment Index, which measures job security, rose to an all-time high of 85 percent. When people are more comfortable with their employment, they are more likely to consider investments.
- 88 percent of all buyers financed their home purchase, with the highest percentage of those financing in the millennial generation.
- 84 percent of millennials believe homeownership is a good investment – compared to 79 percent of buyers of all ages.
The nation’s millennials are beginning to feel more optimistic about job security, their ability to finance a home and the notion that homeownership is a sound long-term investment.
If you’re on the fence about purchasing a home, consider the fact buying is significantly cheaper than renting in most cases, recognize the significant financial, personal and social benefits of homeownership and debunk the stereotypical myth millennials aren’t interested in homeownership. Once you commit to homeownership, you’ll be buying more than simply a home. You’ll be buying a piece of the American Dream.