Why Buy a Home?

These days, many people are understandably wary of buying homes. After the crash of the housing market, many people lost considerable amounts of equity in their homes or worse, saw their homes foreclosed on by the bank. To a lot of prospective homeowners, renting seems like a safer and potentially more affordable option.

However, for many reasons, now is the perfect time to consider buying rather than renting. Here's why:

Great Prices.  According to the Standard & Poor's Case-Shiller Index, home values are down about 30% from their peak. Aggressive buyers have been rewarded with some truly astounding deals, and you're likely to get a lot more home for your money right now than you will again for many years.

Rock Bottom Mortgage Rates. Thanks to aggressive moves from the government to correct the housing freefall, mortgage rates are at their lowest ever right now, around 3.5% for 30 years. You're unlikely to get a better deal in your lifetime, and if somehow the rates fall further, you can always refinance later.

Appreciation. Its predicted over the next 18 months that home values will continue to rise due to large amounts of buyers and constrained inventory.  Its the simple principle of supply and demand.  A lot of people have been on the sidelines waiting and the boat is already starting to pass by.  Values are increasing and interest rates are still at record lows.  Waiting longer is going to cost the buyer more money as prices rise.

The average homebuyer isn't looking for house as a way to make a quick buck. They're looking for a place to live, often for many years, even decades. In that case, what really matters are long-term trends, and over the long-term, the housing market remains perhaps the most reliable investment you can make. 

You may not be 100% sure what your house will be worth in a year or two, but over 10 or 20 years, it's almost certain to appreciate in value, and likely by a considerable amount.

Pride Of Ownership. There's no doubt about it. When you own your property, you feel different about it, and you treat it differently, too. If you've always wanted a sunroom, an in-ground pool or granite countertops, you're free to make those improvements when you own the house. In fact, they're investments that can increase the value of your home. When you're renting, you need permission just to repaint a wall or to have a plumber inspect your pipes. As most people reach a place of financial stability, they prefer to own and to make their home just what they want it to be.

Tax Breaks. The IRS is much friendlier to homeowners. If you own your home, you can deduct mortgage interest from your tax returns. The same goes for property taxes. You're also excluded from being taxed on your capital gains, up to $250,000 for individuals and $500,000 for married couples.

Equity. Those mortgage payments add up, and as you pay down your principal, you'll be building equity. That's something renters never get, no matter how long they stay in their homes. Even better -- once you have equity, you'll be eligible for home equity loans, which offer some of the best rates available, and the interest is deductible.