October 18th, 2017 12:54 PM by Frances Baldwin DRE#01194971 | NMLS#330182
There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. Here are just a few of those reasons to share with your clients: Increase Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400. A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings – effectively reducing the amount of a homeowner's monthly mortgage payment. Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs between 1950 and 2002, US home prices appreciated at an annual growth rate of 4.8%. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 will grow in value to $364,000 over 30 years.