It makes sense why being a home owner is frequently referred to as the Dream. Even though data indicates that homeownership is down from historical levels, individuals still want to be homeowners. As the housing market keeps improving, that figure is probably going to increase. That is good news for the economy as well as for prospective first-time homebuyers.
Importance of Home Ownership
For many people, owning a home represents the stability, independence and freedom of reaching adulthood. While that perception may be changing to some degree as more people wait longer to buy homes, it is still considered a major milestone. Real estate is considered by many to be a sound investment that offers unique wealth-building opportunities.
Buying a home expands options for the future, whether you plan to sell and make a profit or leverage the equity in your home to pay for other major expenses.
Community Benefits through Home Ownership
Homeownership also contributes to the improvement of the neighbourhoods around specific residences. The housing sector is directly linked to the economy; when home sales increase, employment increases as well. These interacting factors result in a more stable local, state, and global economy. This is why many economic analysts wait until the most recent housing data is out before making their predictions, as these data assist in showing the direction the economy is going in general.
The community also benefits from the real estate taxes paid by the property owner. These funds are used for infrastructure services and projects including:
construction of schools
police and fire protection
parks and greenways
government social services
other enriching infrastructure projects
Impact of Homeownership
The impact of homeownership goes beyond the financial aspect. In fact, some of the greatest community benefits are intangible. Homeowners in a city or town are often very invested in the area. They get involved in activities, volunteer for charity organizations and help out with special events. They feel a sense of belonging that is often greater than someone who is renting for a short term.
Home Ownership is a Good Investment
While home prices move in cycles over the short-term, if you stay in your home for a long time, it could increase in value and give you a substantial return on your investment.
You Build Equity
When you subtract the amount you owe on your home loan from the total value of your house, the amount left over is your home equity-the “dollar” value of your home that actually belongs to you. There are two ways to build equity:
With each monthly mortgage payment you make, a portion goes toward reducing the amount you owe on your loan, which increases your equity. In a sense, paying your mortgage is a form of savings, as it increases the equity in your home.
As your home's value increases, it creates more equity for you.