If you’re like most people, your home has become an even more integral part of your life in the past year. Now, it’s much more than a house. It’s also an office, a virtual classroom, and a haven that supplies protection, shelter, and stability through our global health crisis.
Today, almost 66 percent of Americans have the good fortune to own the place they call home.
As you look ahead toward what you want to achieve in the next year — and into the future — it’s a prime opportunity to delve deeper into the advantages of owning your own home. Keep reading to learn more about the many first-time buyer benefits, featuring highlights from a report shared by the National Association of REALTORS® (NAR).
9 financial, non-financial & economic reasons to become a homeowner
Many people question if today’s homeowners get the same advantages as previous generations of homebuyers. It’s easy to forget, but there are many rewards of homeownership that stand the test of time. These range from economic to social to feel-good motivators, extending far beyond the financial payoffs seen as you grow your investment.
Non-financial benefits of homeownership include:
- Better mental health. According to the NAR report, “The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness, and well-being for homeowners and those around them.”
- Increased pride and security. For a first-time buyer, there’s peace of mind in having a place of your own. You can also update, customize, and renovate to meet your unique needs and suit your tastes.
- More community connection. When you own a home, you own part of a neighborhood. Becoming a homeowner gives you stronger ties to your neighbors and community and may help to increase your civic engagement.
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Homeownership has plenty of social benefits, along with its financial gains. What’s really rewarding is that the social benefits that support your family can extend to your community, state, and country. Buying a home is also a smart way to invest in your future.
Financial benefits of homeownership include:
- Boosted savings. As a first-time buyer, you can think of your mortgage as a forced plan for savings. Every monthly payment reduces your loan principal and ups your investment.
- Higher net worth. A homeowner’s total net worth is 40-times that of a renter. Automatically increasing your net worth through homeownership gives you financial freedom and opportunities to invest.
- More security. Some of the biggest financial benefits of owning your own home include home value appreciation, rising equity, and a more stable monthly housing expense. Homeownership proves to help increase your wealth and improve your financial standing.
Every month you pay your mortgage, you’re also building your equity. This equity accumulates and can be cashed out in a few years or farther down the road to knock out debt, pay off unforeseen expenses, fund a wedding or dream vacation, or start your own business (see below). The average homeowner has gained $26,300 in equity in the past 12 months.
Economic benefits of homeownership include:
- Greater spending on housing. Expenditures related to housing are a strong economic driver throughout the U.S., accounting for over a sixth of our nation’s economic activity in the last 30 years.
- Long-term stability. Rent prices are rising in most states. A fixed monthly mortgage that’s often less or equal to a monthly rent payment (likely with today’s low rates) gives you the chance to add to your savings and to protect yourself against inflation.
- Support for entrepreneurship. Since homeownership works as a type of forced savings, it can spur entrepreneurial endeavors. “Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans,” the NAR report also states.
In the midst of a pandemic, the housing market has been a powerful force in helping our economy recover. Homeownership helps GDP growth, encouraging an economic rebound. As NAR’s report explains, each 10-percent increase in total housing market wealth yields an extra $147 billion (approximately) in spending from consumers. This adds up to 0.8 percent of GDP, not to mention billions more in newly produced tax revenue.
Oh, the vacations you will take…
If you’re a renter dreaming of owning, this is the year to do it. Connect with a local loan officer who can help you find an affordable mortgage program with a stable monthly payment. Then start building your equity and planning your bucket list trip.
For educational purposes only. Please contact a qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.