Is Homeownership Right for You?

Everyone knows this is a buyer's market- so, understandably folks are are trying to decide whether or not it is the right time for them to buy a home. Becoming a homeowner is a big decision that should be carefully considered from the short- and long-term perspectives.

What makes now a good time to buy a home?

There are a lot of reasons that now is a good time to buy a home.  Interest rates are at record lows; home prices are competitive, which allows you to get more home for your dollar; and there is a wide selection of homes on the market to choose from.

Many home owners will also see savings on their federal income taxes for years to come. Deductions are often available for the mortgage interest and real estate taxes you pay each year on your home. These savings can add up significantly over the years. For example, a borrower with a $60,000 annual income with a $180,000 mortgage at a 5.5 percent interest rate would see a savings of $5,939 over the first five years. Also, when you eventually sell your house, there is a capital gains tax exclusion on the

money you make from the sale of your primary home, under a certain dollar amount. 

Renting can be cheaper than buying, why is it better to buy?

Renting is not really cheaper- especially in the long run. Owning a home builds equity and helps grow your personal wealth over time. When you own your own home, you will realize a return on your investment when you sell since housing historically appreciates over the long term. In contrast, you get no return on investment when renting. 

Also, with a fixed-rate loan, your monthly mortgage payment will remain the same. This does not hold true for rent, which can increase each year. If you continue to rent long term, you may find that your rent will eventually be higher than a mortgage payment would have been if you had purchased earlier. And you can never get that money back, unlike the advantage of homeownership. 

Check out our website for a list of tax professionals to help you make the most of tax advantages for homeownership, a list of banking professionals who can assist you with home mortgages, and a list of building professionals who can help you make the best decision when buying, building and remodeling a new home.

KC Hart is the Director of Marketing & Communications for the Asheville HBA.