Top 5 Reasons to Buy a Home in 2012 - Quicken Loans Zing BlogThe American dream of homeownership is a very feasible aspiration for 2012.

There are many benefits of owning a home.  Yet some first-time buyers are skeptical of purchasing with the uncertainty surrounding the housing market.

The uncertainty many reference when speaking about the housing market involves a specific date when home values will increase. Since no one 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 uncertainty during the George H. W. Bush administration in the early 1990s 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 by stating “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 to protect and preserve it.”

This statement is still true more than 50 years later.  There are many reasons to take pride in homeownership such as:

  • 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 in many parts of the country are 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 you decide to sell once the market rebounds.
  • Property Tax Deductions – For income tax purposes, real estate property taxes for a vacation home and first home are fully deductible.  The IRS (Publication 530) 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 tax treatment.
  • Equity Building – Many factors such as credit qualification, loan flexibility, and annual percentage rate (APR) contribute to the final decision of what type of mortgage loan best fits your goals.  Yet, a new trend being used by some homeowners is to actually add money to their monthly payment to decrease the principal balance of their loans at a much faster pace.  This trend is called equity building.  Equity builders usually select 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:
  • Pay off 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 equity is 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 to build an NBA regulation size basketball court on my own property.  For my coworker Joel Jarvi, home ownership may allow him to build the indoor slide of his dreams.  No matter who you are, homeownership is a purchase, commitment, and journey that’s sure to bring you pride.

Furthermore, when the uncertainty surrounding the housing market fades and the market rebounds, homeownership may in fact transform that pride to profit through a home sale.

 

Jonathan Slappey is a writer for Quicken Loans, a company whose clients believe it’s Engineered to Amaze.  Interested in being Amazed by us? Read trusted reviews at our review site.

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This Post Has 45 Comments

  1. I like the helpful information you provide in your articles.
    I will bookmark your blog and check again here frequently.

    I am quite certain I’ll learn many new stuff right here!
    Best of luck for the next!

  2. We’re in the process of buying a house and everything seems to be going smoothly. We are renting at the moment and our landlord has says we can leave before our contract is up (June) as long as we give two months’ notice. But we are wary of giving so much notice as we have tried to buy a house before and it has fallen through just before the completion date. If we give notice and then for some reason, don’t end up buying the house, we’ll be homeless! Any suggestions or do we just take the risk?

    1. Thanks for writing! To help answer your question, we’ve reached out to our experts in this field at In-House Realty who should have some suggestions for you shortly.

  3. Can’t disagree with any of these reasons!

    I am 25, and buying a house is now entering the sphere of my life. When will it happen? Will it happen soon?

    Not too soon for me, but it is coming up. It is just so tricky. More than almost any other decision in life, buying a home is impacted by every other decision you are making in your life – and future decisions or actions you want to take as well.

    Putting all that together and finding an answer is… well.. just… HARD.

  4. […] Calculate Your Monthly Mortgage PaymentsWhat will Happen to Monthly Mortgage Payments when Interest Rates RiseYou’ve Seen This Before…New Record Low Interest RatesRecord Low Interest RatesHow to Stop Low Interest Rates From Ruining Your RetirementShort Hills, Millburn, Livingston, New Jersey and Midtown Direct Real Estate, Home Buying and Selling, Top RealtorHouston Credit Repair Services – Houston TXTop 5 Reasons to Buy a Home in 2012 […]

  5. Owning your own home is definitely a strong anchor for your life. Yet, I am very particular of mortgage rates since I’m on a budget. Any idea of the best mortgage rate deal?

    1. Hi Carol, we’d be happy to take a look at your situation to see what we can offer you, I can have one of our home loan experts contact you to see if we can be of assistance. Thanks.

  6. No worries for home buyers today. It’s time to buy a new house because based on the surveys and news, prices are down low as well as the interest rates are at it’s lowest.

  7. I’m lucky to be selling Real Estate in Burlington, VT where the market is doing really well compared to many areas. Our firm of 60 agents is up 29% in sales year to date compared to this time last year. I much agree people need to buy smart today and “take pride in home ownership”.

  8. Those are all good reasons however, what about the market disruption from big banks and the fed’s artificially low interest rates? There are many instances where banks are holding off inventory to keep prices high. In addition, the toxic mortgages are still in the fed’s books and have not been cleared off yet…

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