Owning a home can be a huge milestone in someone’s life. In fact, in 2022, 65.9% of Americans owned their own home, according to data released by the National Association of Realtors. That is the highest number since 2011.
Due to higher interest rates and a shortage of inventory, the housing numbers are currently stalled or slowing declining. And while interest rates can play a role in the short term, it’s definitely not the whole story—or even a quarter of it. The adage “Marry the home, date the rate” is true. An interest rate is merely a means to an end. Once rates come down, you can refinance and lower your payment.
In the meantime, you’ve still managed to enjoy these 7 proven benefits of being a homeowner in Richmond, Virginia! Spoiler alert: Many of them are financial.
Enjoy the Tax Deductions
The United States Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home. Now it’s always crucial to speak to a tax professional when making decisions of this nature. But there are deductions to be had if you own property—and there are none if you rent.
Appreciate your Appreciation
Historically, real estate has a long-term, stable growth in value. In fact, median single-family existing-home values have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®.
The housing crisis of 2008 caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis.
According to our data, Richmond is up 36% in 4 years! So theoretically, if you bought a home in in Bellevue 4 years ago for $350,000, it could be worth almost 126,000 more today. (Of course, there are lots of factors here, but you get the gist.)
It’s also important to note that the previous downturn was due to predatory banking practices, which numerous regulations have been implemented to safeguard the housing market against another similar situation.
In addition, the number of U.S. households is expected to rise 10 to 15 percent over the next decade, creating continued high demand for housing.
Build that Equity
Money paid for rent is money you’ll never see again, but mortgage payments let you build equity ownership interest in your home. And that can give you cash leverage if you need it for a remodel or debt consolidation. Bottom line: You can’t monetize the home you rent. You can on a home that you own. (Hmmmm, sounds similar to the tax deduction story.)
Building equity in your home can be a ready-made savings plan. And when you sell, you can usually take a significant portion as gain.
Then Use Equity to Save
I know. I know. Having to pay when things break doesn’t seem like a ready-made savings plan. But according to experts, it does!
Building equity in your home can be a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax. (Because laws can change annually, always talk with a tax professional.)
Discover Financial Predictability
Your fixed-rate mortgage payments area hedge against inflation. Unlike rent, they don’t rise over the years—or on a landlord’s whim. This means your housing costs may actually decline the longer you own your home. It is important to keep in mind things like property taxes and insurance costs will likely increase.
Embrace the Freedom to Express Yourself
*Cue the Braveheart bellow* There’s something to be said for the power and freedom of ownership. That little bungalow or stately colonial is yours. You can decorate it any way you want and choose the types of upgrades and amenities that appeal to your lifestyle. So whether your vibe is mid-century, traditional or farmhouse chic, you’re free to express yourself to your heart’s content. Nesting is a beautiful thing! (If you are already a nester-extraordinaire, see the latest trends from this year’s Homearama.)
Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community and gives children the benefit of educational and social continuity. (Having your kid grow up next door to their bestie is kinda nice!) It’s even better when you ALSO are next door to your ride-or-die.
Ready to Reap the Benefits of Homeownership?
The process of buying, right-sizing, upgrading or first-time-ownership can seem daunting. That’s why it’s important to partner with an agent who can help you through the process of deciding what’s next. A professional can help you think through the pros and cons—and help you maximize your current or future position. And we’re patient. If you’re not quite ready, then we can get your started along that path so that when you are, you can hit the ground running.
Reach out to your favorite Beran Group agent and let us help!
*Information courtesy of the National Association of Realtors Magazine
Mair Downing is the editor at BeranGroupHomes.com. She oversees the development and creation of all of our articles, so if you like them, be sure to let her know!
Mair is also an amazing Realtor with The Beran Group. She’s never met a stranger, so it’s no surprise if you feel like old friends after the first meeting. Mair is passionate about helping sellers and buyers navigate the sometimes complex world of real estate. She is experienced in helping clients buy, sell, invest and rehab-to-sell. Mair is a born problem solver and relationship builder, which helps to make transactions go smoothly!