The uncertainty many reference when speaking about the housing market involves a specific date whenhome values will increase. Since noone can pinpoint this date, the word uncertainty (when paired with the housing market) often reveals a negative connotation.
There are some factors we can be certain about in this housing market such as home values rebounding. This is true; the housing market often moves in cycles.
It’s safe to assume that many Americans harbored the same uncertaintyvduring the George H. W. Bush administration in the early1990s when the national homeownership rate fell from its previous historic high of 64.4 percent in 1980 to a low of 64.1 percent in 1991.
In the 1960s Lyndon Johnson illustrated a correlation between homeownership and accountability bystating "owning a home can increase responsibility and stake out a man's place in his community…The man who owns a home has something to be proud of and reason toprotect and preserve it."
This statement is still true more than50 years later. There are manyreasons to take pride in homeownership suchas:
Appreciation – Buying a home now (at the current rates)can almost ensure your home's appreciation in the future. Mortgage rates are near historic lows and home prices inmanyparts of the countryare down. This is the perfect recipe for home appreciation. Additionally, many foreclosed homes are available for a fraction of the original cost. This can translate to a higher profit if youdecide to sell once the market rebounds.
Property Tax Deductions – For income tax purposes, real estate propertytaxes for a vacationhome and first home are fully deductible. The IRS (Publication530)provides detailed tax information for first-time buyers that may answer many questions about what deductions homeowners are eligible for.
Preferential Tax Treatment – If you own your home for more than a year and receive more profit than the allowable exclusion after the sale of your home, the profit will be considered a capital asset. Capital assets are given preferential taxtreatment.
Equity Building – Manyfactors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loanbest fits your goals. Yet, a new trend being usedby some homeowners is to actually add moneyto their monthly payment todecrease the principal balance of their loans at a much faster pace. This trend is called equity building. Equity builders usuallyselect a home loan with a lower interest rate (and a shorter term loan such as a 15-year fixed) to help build equity faster. This rapid payment process allows borrowers to:
Payoff the principal balance faster Lock in near-record-low interest rates Shorten the length of their home loan Own their home faster Pay substantially less mortgage interest
Equity building is a beneficial trend that’s becoming more and more popular with fiscally responsible homeowners. Also, home equityis the largest single source of household wealth for most Americans.
Pride – Homeownership offers many benefits to many different types of people. For some homeowners, playing your music as loud as you want and painting the walls the color of your choice is a perk. For me, homeownership will permit me tobuild an NBA regulation size basketball court on my own property. For mycoworker Joel Jarvi, home ownershipmay allow him to build the indoor slide of his dreams . Nomatter who you are, homeownership is a purchase, commitment, and journeythat’s sure tobring you pride.
Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership
Top 5 Reasons to Buy a Home in 2012 | LinkedIn
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