Buying a house is a major commitment, but fear not — the benefits of homeownership are well worth the struggle. Here are 9 perks that come with the keys. —-
Buying your first house takes gumption. You resist splurging on Insta-worthy vacations to save for a down payment. Then you hold off on converting those savings into stocks for the latest plant-based start-up your cousin raves about. You fight every temptation in hopes of joining that glorious homebuyers’ circle, and just before you pull the trigger, you stumble upon an infographic telling you renting is actually cheaper — is this struggle even worth it?
The short answer is: yes. We’ve got a long answer for you, too, and we’ll cover nine benefits to homeownership that make buying a house totally worth it. But first, to be fair, let’s touch on the perennial own vs. rent debate.
Consider the caveats before you commit to a mortgage
Homeownership has its perks, but wealth-building and happiness are by no means guaranteed. To make buying a house worth it, you’ll need to:
Prepare your finances: Buying a house includes an array of costs on top of your down payment (think: Realtor® fees, home insurance, property taxes, home maintenance costs, and so on). Calculate how much you should save with our first-time homebuyers guide.
Commit to a location: Investment-wise, housing is a long game, not a short one. The rate of return on a housing investment significantly increases the longer it’s held as your equity grows and your home appreciates in value over time. If you’re ready to move for a job at the drop of a hat, consider renting until you settle into an area.
Buy the right house: Buying the wrong house can lead to buyer’s remorse — or worse: foreclosure. Team up with a top real estate agent so you can find the right home for your needs (and negotiate the best deal for your wallet).
Resist refinancing for the wrong reasons: Just because you can tap into your home’s equity, that doesn’t mean you should. Avoid refinancing your house to pay off debts or purchase consumable goods that don’t add value to your property. Refinancing your home detracts from your forced savings and often costs more than the promised lower interest rate is worth.
In other words, if you’re strapped for cash or you’re only planning to live somewhere for a couple of years, renting is probably still your best option. The upfront costs associated with buying a home can amount to thousands of dollars, and — pandemic-induced seller’s markets aside — it can often take years for your home’s value to increase.
Ultimately, responsible homebuying involves lots of preparation (and perhaps even more patience), and only you can determine when and if you’re ready.
That said, there are lots of reasons why owning a home is pretty great!
1. You have to live somewhere
At the end of the day, you have to live somewhere — so why not own the place you call home? If your lifestyle and livelihood tick the “does this make sense” boxes for homeownership, then buying a house is definitely worth it. Perhaps especially now, on the heels of a pandemic.
“Supply and demand drives economics beyond anything,” says Adam Slivka, an Irwin, Pennsylvania-based agent with a decade of experience. “At the beginning of this year, nationally we’re at one-third of the home inventory we were at a couple of years ago at this same time. I just don’t see that the amount of inventory is going to increase fast enough to fulfill demand, which means I think prices are going to continue to go up.”
Slivka also points out that mortgage interest rates are increasing — so not only are home prices still rising, you’ll also pay more for the home in the long run.
There’s an old saying about how the best time to invest was yesterday; the second-best time is today — the same is true for prospective homebuyers.
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2. Your home isn’t supposed to be an investment
Okay, so we just made an investment reference, but buying a house isn’t technically meant to serve as an investment.
The premise is that property is a financial investment because, historically, real estate appreciates in value over time. But you have to sell in order to profit, and the primary purpose of a house is to, well, house people.
“If you’re buying a house for 10 years or more, if it’s long-term, if you’re building a family, a house is more than an investment, financially,” says Daniel Robins, a top agent in West Chester, Pennsylvania who has been selling real estate for 20 years. “It’s an investment in your family; it’s an investment for you to have a foundation to build on.”
Even if you don’t plan to live in the same house for the rest of your life, if you focus too much on the concept of your home as an investment rather than a shelter, you may be tempted to tap into your equity and borrow against the house. While using home equity certainly can be done responsibly — and can even contribute to improving the value of your home — such activity isn’t without risk.
How does all of this contribute to the argument that buying a house is worth it? It’s all about perspective. If you buy a house and think of it as a home, a safe space, a true shelter for your family — and moreover, as something you own and thus have the security of knowing you have that shelter for the foreseeable future — you can relax and enjoy perhaps more than if you go into the decision strictly with the intent of turning a profit.
“For me, if it’s 10-years-plus, don’t worry about it — go out there and find a house,” says Robins.
3. But paying a mortgage does help you save
Buying a home builds long-term wealth through “forced savings.” With each mortgage payment, you pay down your debt and accumulate equity in your house. You save automatically compared to the conscious effort needed to allocate money into your investments or savings account. When you reach the finish line of the mortgage marathon, you own an asset worth tens or hundreds of thousands of dollars outright.
Eager to play devil’s advocate, some economists argue that, depending on the housing market, you can theoretically save more money renting compared to buying a house. This stance highlights that homeowners expend more recurring costs than renters (for example, property taxes, mortgage interest, maintenance costs, homeowner’s insurance, and homeowners association or HOA fees).
Yet real data from the latest federal Survey of Consumer Finances reveals the average homeowner boasts a net worth of $195,400 compared to just $5,400 of the average renter; that’s 36 times greater wealth.
The difference between theory and practice? Discipline. For most Americans, forced savings is a hell of a lot easier than resisting the temptation to spend the spare cash they’d need to consistently save or invest to make renting a better deal.
4. Stabilize your monthly housing costs
Life’s full of surprises — housing doesn’t need to be one of them. When you buy a home, you remove the threat of landlord changes, lease termination, and rent spikes, a bane particularly plaguing city dwellers.
While the national average rent has steadily risen in recent years (11.3% between 2014 and 2019), rent in expanding metro areas has lurched to new heights. As of February 2022, the average rent for a two-bedroom apartment is $1,295 per month — varying from $1,617 in Hawaii to $725 in West Virginia. Statistically, your rent is likely to increase year over year. And if you live in a major metro area — think New York City, Los Angeles, San Francisco, Chicago, and so on — rent increases are all but guaranteed.
As a homeowner, meanwhile, your property taxes and home insurance rates may fluctuate, but you can control the majority of your monthly housing costs with a fixed-rate mortgage. For even greater predictability, take control of your monthly utility bills with these energy-saving tactics:
Swap out old appliances for new energy-efficient models.
Insulate your home with dual-pane windows and door sweeps.
Convert to drought-resistant landscaping.
Switch your utilities to budget billing, and set monthly utility payment based on your average yearly usage.
5. Grow with a local community
When you buy a house, you’re not just another tenant swinging through a rental’s revolving door. You’re tethered to a location, tied to a community.
“Buying a home gives you roots. You meet a community, you become part of that community, and you establish a long-term relationship with a neighborhood, regardless of what age or demographic you are,” shares Christina Griffin, a top-selling real estate agent in Tampa, Florida, with 18 years of experience helping buyers find the perfect home.
Communities with high own-to-rent ratios enjoy less crime, higher property values, and better voter turnouts. Neighbors connect through HOAs and online networks like Nextdoor to organize everything from neighborhood watch to Fourth of July bike parades. An ongoing 80-year study by Harvard proves a sense of community is essential to living a long and healthy life — all the more reason to settle in and stay a while.
6. Take advantage of homeowner tax breaks
Talking tax benefits is still talking taxes, so we’ll make this quick. Here are the top tax breaks for homeowners:
Mortgage interest tax deduction
Deduct interest on up to $750,000 of a home loan for married couples, plus mortgage points if you bought them at closing.
Mortgage tax credit
Lower-income households who received a qualified Mortgage Credit Certificate (MCC) to purchase a house receive a credit amount of 10% to 50% of mortgage interest paid during the year.
The residential energy efficient property credit offers tax breaks on certain eco-friendly upgrades made to your home. This includes things like qualifying HVAC systems, water heaters, new windows, and more.
Home sale tax exclusion
When it’s time to sell, enjoy a tax break on capital gains of $250,000 for single homeowners and $500,000 for married homeowners filing jointly. You’ll need to pay tax on profit beyond this threshold. See our full breakdown of the calculation here.
Implicit savings with imputed rent
Put on your thinking cap and pour yourself a double espresso for this one. Homeowners in the U.S. benefit from the hidden imputed rent tax break, meaning the government does not tax the payments you make as a homeowner into your mortgage as they would if those payments were funneled through a renter. Check out Business Insider’s breakdown of this tricky, but wicked concept.
7. Design your house so you feel at home
Throw out your Command hooks and nail that oil painting to the wall! Home design is one of the most entertaining parts of owning a house (HGTV is the fourth-most-watched cable network in the country, after all…).
Enjoy free rein tailoring each room to your personal taste until you feel at home. Seventy-four percent of homeowners shared they have a greater desire to spend time in their house after remodeling. Your interior design and curb appeal enhancements not only improve your lifestyle, but they also have the potential to add value to your home, making a messy DIY weekend absolutely worth it.
So go ahead — paint the walls blue, convert a closet to a wine rack, install a mid-century mailbox. The world is your oyster.
8. Enjoy the comforts of increased privacy
Buying a house buys you privacy: no more nosy drive-bys or 24-hour entry notices from your landlord. When the A/C blows hot as July, you choose the service provider and pick a time best for your schedule (probably with greater urgency than a landlord would).
You can also increase your privacy with physical home additions such as front yard fences, backyard lattices, and clever landscaping; or add smart home security systems like Ring, which sends alerts and live footage of your home’s entry points straight to your phone. You’re in control of your family’s privacy and comfort.
9. Say hello to your new side hustle
Quit working for Uber and turn your house into your side hustle. Earn money from your spare rooms so you can pay off your debt or subsidize your mortgage.
For couples buying a home to grow into, the money you earn from those extra bedrooms can go toward the college fund of your future kids they’re designated for.
Host with Airbnb
Experience travel vicariously through hosting guests with Airbnb. On average, Airbnb hosts earn $924 a month; with high-priced outliers taken into consideration, the median earning is still $440 a month.
Offer weekly and monthly discount rates to compete with hotels and short-term rentals, and charge a cleaning fee to refresh the space between guests. Regulations placing limitations on Airbnb are continuing to develop, so be sure to check your local laws and HOA rules before listing.
Rent a room
If you’d prefer a longer-term roommate, rent your spare bedroom to a local student or young professional. A recent analysis of U.S. Census Bureau data suggests if Americans rented out their spare bedrooms, they’d earn $6.2 billion a week. You’ll need to claim the rent for income taxes, but you will also benefit from deductions on repairs like carpet replacement.
Split your mortgage with a duplex
Buying a duplex provides a balance of rental income and privacy — your renters aren’t sharing your personal living space.
Griffin explains that duplexes are big in Tampa: “People are liking duplexes. They’re selling at top dollar right now. They’ll have a family living in one unit, then they’ll rent the other side, and it covers most of the mortgage payment.”
Buying a duplex also teaches you the ins-and-outs of real estate investments. Learn the laws, test your landlord abilities, and convert your half into a second rental when you’re ready to move your family to an upgraded home.
10. Achieve mortgage-free living and sail into retirement
The biggest reason why buying a house is worth it? When you pay your house off, you own an asset outright, which you can also live in (not to mention sip celebratory Champagne inside of). Thirty-seven percent of U.S. households are owned outright, their occupants “free and clear” of mortgage payments. Accomplish outright homeownership and enjoy saving or spending the significant portion of your income previously assigned to housing.
When you reach retirement, this dispensable sum is ever more important as your income fixes. With minimal housing costs (property taxes, utilities, HOAs, and so on), you greatly increase your monthly spending budget — say aloha to a spontaneous trip to Hawaii!
Even if the house you buy now isn’t the one you’ll take off from, you can always sell the house to help fund your retirement. The average American has roughly twice as much value in home equity as they have in their retirement savings. Selling your house allows you to liquidize your equity and put it toward buying a smaller house for cash or moving to a more affordable state.
11. Pride of ownership is profound
Buying your first house is a mega-accomplishment, an important life milestone, even a realization of the so-called American Dream. In a recent survey conducted by the National Association of Realtors®, buyers ranked “desire to own my own home” as their primary reason for buying a house.
The majority of surveys show that citizens still view homeownership as a part of their American dream (in 2018, 90% of millennials said they aspired to buy a house someday, though even then they felt the goal was out of reach for several years). When you buy a house, you own land, you express greater independence — you’re the master of your domain.
When you’re ready, buying a house is worth it
Buying a house is a major commitment, but the financial and lifestyle benefits are well worth the cost. Real estate is not the only investment out there, but it’s certainly one of the most rewarding. After all, achieving homeownership is about more than buying a house — it’s about settling into a home.
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