The debate about homeownership versus renting has continued over many decades and there is always a consistent winner – homeownership. Even with a continual annual rise in the prices of most average US homes, the consensus is that it is still cheaper to buy rather than to rent; with differences ranging from 20% to 50%, depending on the suburb, city or state, making for a nationwide saving of 37.7%.
To get the most benefit from homeownership, it’s best to live in your home for at least seven years and have a mortgage with reasonable terms.
Building equity is one of the essential reasons for preferring to purchase over renting, and it is a sure hedge against rising inflation. For most people homeownership is the closest they will ever come to having a savings account.
Besides saving on rental inflation, owning your own place also allows you to have the upper hand on how you maintain or renovate to suit your family’s needs.
A large portion of the money saved will come from the following tax benefits*:
- On a loan of $1 million or less, the interest paid on your mortgage may be deductible
- Property taxes, except for payments into your escrow account, may be deductible
- Your insurance premium may be deductible according to your family income
- Energy- saving improvements come with a 10% tax credit of up to $500
- Capital gains tax exemption on the first $500,000 for married couples, and $250,000 for singles
*Consult with your tax advisor on the above scenarios.
I am an attentive and experienced REALTOR® that gives my all to every home buyer or seller I work with. Looking to buy or sell in the Austin/Georgetown area? Reach out for proven expertise and representation.