Why Young Adults Should Purchase a HomeReturn to Blog
Buying a house can be a difficult task for anyone to do. So of course with student loans, an entry-level job, and the desire to travel and explore the world, it’s understandable why as a young person there’s the decision to rent over buying. However, homeownership presents many benefits that cause a significant impact to your financial future when choosing to purchase a home earlier rather than later. There’s a reason that Urban Institute finds $72,000 difference between those who purchase a home between 25 and 34, and those who waited to buy until 35 to 44.
1)Building Equity: Why is it Important to have Equity? What is Equity?
One of the most important and crucial parts of owning a home is generating and building equity. Equity is the amount of wealth you have generated from owning your home. Equity can be generated by paying your monthly mortgage, or by appreciation in home value. This wealth can be used later to do things that would otherwise create a challenge for those without it. Equity can be used to pay for higher education, make home improvements, pay for higher education, gain an even better home, and so much more.
2) Stability: The Benefits of Owning versus Renting
Owning a home provides a level of stability that renting cannot match. When you rent, you are subject to rent increases, lease expirations, and the possibility of being forced to move if your landlord decides to sell the property or terminate your lease. When you own a home, you have more control over your living situation, and you can make decisions based on your needs and preferences. According to Rent.com, the average rental price in March 2022 increased by 22 percent compared to the same time last year. In comparison, home prices increased 18.8 percent from 2021, according to the 2021 S&P CoreLogic Case-Shiller U.S. National Home Price Index. Source: Travis Credit Union
3) Tax Benefits: How to Make Your Home Work for You?
Homeownership also comes with several tax benefits. Mortgage interest and property taxes are deductible on your federal income tax return, which can significantly reduce your tax bill. Additionally, if you sell your home for a profit, you may be able to exclude up to $250,000 of the gain from your income taxes if you have lived in the home for at least two of the past five years. And according to Forbes, if you work from home there's a possibility you can even discount some of those expenses.
4) Forced Savings: How Buying a Home Can Save You Money
Buying a home is a significant financial commitment, but it can also be an excellent way to force yourself to save money. When you make your monthly mortgage payments, you are building equity and saving for the future. Additionally, because owning a home requires maintenance and repairs, you will need to set aside money for these expenses, which can help you develop good saving habits.
5) Pride of Ownership: What Owning a Home Means
Finally, homeownership provides a sense of pride and accomplishment that renting cannot match. When you own a home, you have a stake in your community, and you can take pride in maintaining and improving your property. Homeownership can also provide a sense of stability and security that can be beneficial for your mental health and overall well-being.
While homeownership may not be for everyone, there are many benefits to consider, especially for young adults. By starting at a younger age, you can build equity, establish stability, take advantage of tax benefits, force yourself to save, and experience the pride of ownership.
If you are interested in exploring your options for buying a home, contact Darryl Glass, Realtor, firstname.lastname@example.org (510) 500-7531 Advent Properties Inc in Oakland, CA, for guidance and support throughout the process. Cal DRE #01919978
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