Renting Versus Buying Your Home
Pride in Owning: Most people buy homes to have control over where they live. Although investment features are important, the psychological reasons for buying— the satisfaction of owning and freedom from paying rent—are at least as important.
In a survey done by the National Association of REALTORS® of 6,000 homeowners and 2,000 renders—perhaps the largest survey ever of attitudes toward home ownership—it was shown that 76% of owners and 66% of renters considered pride of ownership an important reason for buying.
Dislike Paying Rent: Close to 7 in 10 of almost equal portions of owners and renters expresses a dislike of paying rent as an important reason to buy. Renting offers a lifestyle that’s nearly maintenance-free. That may appeal to you, but consider that renting offers you no equity, no tax benefit, and no protection against regular rent increases. Writing a rent check is just like watching your hard-earned money sail away!
Settling Down: More than 6 in 10 renters said “settling down” was an important reason to buy.
Good Investment: 76% of owners and 69% of renters said that the investment aspect of ownership was important.
Tax Advantages: Property taxes and qualified home interests are deductible on Schedule A, for itemized deductions.
Long Term Appreciation: People consider homeownership a good investment because they view it as a long-term venture. Historically, home prices have risen at relatively steady rates. Existing home prices rose an average of 4% per year between 1980 and 1992.
Leverage Investment: People borrow a great deal to buy homes, yet they receive the full benefits of price appreciation. In the long run, investments in homes far outpace inflation rates.
Source of Savings: Homeownership always has been and continues to comprise the single largest source of savings for American households. Homeowners build equity and can borrow against it.
Sacrifices are worth it: Almost 7 in 10 renters in the National Association of REALTORS® homeownership survey said that they planned to buy a home in the future. More than three-quarters of these people said they were willing to sacrifice to do that.