Study after study shows that no matter what generation Americans belong to, the vast majority believe that homeownership is an important part of their American Dream. The benefits of homeownership can be broken into two main categories: financial and non-financial (often referred to as emotional or social reasons.)
For Americans approaching retirement age, one of the greatest benefits to homeownership is the added net worth they have been able to achieve simply by paying their mortgage!
The Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater, with nearly half their net worth coming from home equity!

 

 


The Cost of NOT Owning Your Home
The Cost of NOT Owning Your Home | MyKCM

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Zillow recently reported that:

    “In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.”

What proof exists that owning is financially better than renting?
1. We recently highlighted the top 5 financial benefits of homeownership:
Homeownership is a form of forced savings.
    Homeownership provides tax savings.
    Homeownership allows you to lock in your monthly housing cost.
    Buying a home is cheaper than renting.
    No other investment lets you live inside of it.
2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.
3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years.
4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!!
Bottom Line
Owning a home has always been, and will always be, better from a financial standpoint than renting.

Some Highlights:

    Only 2.9% of homes are in serious delinquency, down 17.1% from July 2015.
    This is the 57th consecutive month with a year-over-year decline.
    The national foreclosure rate has returned to August 2007 levels, at only 0.9%.