10 reasons to buy a home
With newspaper headlines declaring that foreclosures are on the rise, short sales are difficult to navigate, and the rate of homeownership is on the decline, some home buyers may no longer see the value of purchasing a home. However, there are several reasons why homeownership makes economic, financial, and personal sense.
MAKING SENSE OF THE STORY
- Home prices have declined approximately 30 percent from their peak, according to Standard & Poor’s Case-Shiller Index, which is good news for home buyers hoping to purchase a house at an affordable price. As a result, statewide affordability reached 64 percent in the second quarter of this year, meaning 64 percent of California households could afford to purchase an entry-level
home in the state.
- Although home buyers should not view a home strictly as an investment, generally speaking, homeownership does offer risk capital. The median home price in California has risen year-over-year for nine consecutive months, which implies home equity will increase over the next few years.
- Owning a home also can be beneficial because it acts as “forced savings.” While the monthly mortgage payment may be slightly higher than renting an apartment, most renters do not put the difference into a savings account. The portion of a monthly mortgage payment that’s allocated toward the principal of a mortgage shouldn’t be viewed as a cost, but rather as a forced monthly saving, because in the long run it’s building equity in the home.
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