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Benefits of Owning a Home

Homeownership still has many benefits, even in today’s market. Here are a bunch of facts that I have dug up that show why owning a home still has benefits today:

  • Despite recent slowdowns in some markets, housing remains a great long-term investment, and demographic demand favors housing over the long term:
    • The children of the baby boomer generation, often celled echo boomers, are the second largest generation in U.S. history, comprising about 75 million people born from 1982 to 1995. The oldest of these echo boomers are new entering years in which people typically buy a first home, while the country’s 78 million baby boomers remain in peak earning years. Source: U.S. Census Bureau
    • Immigration continues to rise. Net U.S. immigration has averaged about 1.2 million annually since 2000, and the foreign-born represented more than 40 percent of net household formations in the first half of this decade, up from less than 30 percent in the 1990s and about 15 percent in the 1980s. Source: The Joint Center for Housing Studies at Harvard University
    • Minorities’ share of household growth has been expanding. It is estimate that minorities will comprise 68 percent of the projected household growth between 2005 and 2015. Source: The Joint Center for Housing Studies at Harvard University
    • Homeownership offers immediate benefits and long-term value. Homeowners accumulate wealth for the future while enjoying the benefits of a shelter they can use, improve and sell.
  • Many buyers know that homeownership is an investment in their future. More than three-quarters of all recent buyers believed their home purchase was at least as good as an investment in stocks. Source: 2007 National Association of Realtors Profile of Home Buyers and Sellers
  • According the the 2007 National Association of Realtors Profile of Home Buyers and Sellers, first-time home buyers made a median downpayment of two percent, while repeat buyers who financed their purchase put down 16 percent, indicating a wealth-building effect of homeownership.
  • The Economic Stimulus Act of 2008 has raised the 2008 FHA loan limits to 125 percent of the area’s median home sales price, not to exceed $729,750. Beyond that, HR 3221 extended this permanently. Now, many more Americans will have the benefits of FHA mortgage insurance. View a county-by-county list of the FHA loan limits here.
  • The conforming (Fannie Mae and Freddie Mac) loan limit has also been raised to a limit of $729,750, depending on the area’s median home sales price. Because they can be sold on the secondary mortgage market, loans meeting this conforming limit come with lower interest rates than those that do not, making mortgages more affordable for many. To see where your county stands, go to the same website as shown above for FHA limits, but change the “Limit Type” from it’s default of “FHA Forward” to “Fannie/Freddie.”
    • According the National Association of Realtors research, the increased conforming loan limit will result in more than 300,000 additional home sales and strengthen current home prices by two-to-three percent.
  • Over the past 30 years, home values have risen more than six percent annually. Source: National Association of Realtors existing-home sales historical series
  • On average, the value of a home nearly doubles every 10 years. Source: National Association of Realtors existing-home sales historical series
  • 60 percent of the average homeowner’s wealth comes from their home’s equity. Source: Housing and Urban Development “Homeownership and its Benefits: Urban Policy Brief No. 2 – 1995”
  • The average homeowner’s net worth is $171,000 – that’s nearly 46 times that of a renter’s, who has an average net worth of $4,600. Source: Federal Reserve Survey of Consumer Finances
  • Homeownership is an investment in your future. It provides shelter and security, and it fosters involvement in community life, and provides important social & economic benefits.
  • Owners move less frequently than renters, providing more neighborhood stability. In turn, involvement in community quality-of-life issues helps prevent crime, improve childhood education and support neighborhood upkeep. Source: U.S. Census Bureau
  • Homeowners stay in their home a median of six years. Source: 2007 National Association of Realtors Profile of Home Buyers and Sellers

Thank you for reading; if you would like to talk about a new home loan for yourself, please contact me or apply now online for free!

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