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Top 5 Major Reasons Why it is Better to Own Than Rent

Owning a home has great financial benefits.

I am often asked, why should I buy a house? Is it better to buy a home vs renting? In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

 

1. Housing is typically the one leveraged investment available

When you own your home it allows you to amplify any appreciation on the value of your home by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

These are only my top 5 favorite financial benefits of homeownership but there are even more! From a financial standpoint, if you can achieve homeownership and opt for renting you may be cheating yourself. Owning a home is definitely better than renting if you have the financial ability.

Your local real estate expert is always happy to help.

Schedule a Free Real Estate Consultation

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Danielle Gaynor, REALTOR

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

 

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August 2018 Housing Market Update

August 2018 Housing Market Update: In both Washington D.C. and Baltimore Metro, prices set August records, but as more listings enter the market and sales show signs of slowing, inventory levels decline at the smallest rate of the last year.

The following analysis of the Washington, D.C. Metro and Baltimore Metro Area housing markets has been prepared by Elliot Eisenberg, Ph.D. of MarketStats by ShowingTime and is based on August 2018 Bright MLS housing data.

Click here to access the full PDF version of this report

DC Metro Area – Overview

  • The Washington D.C. Metro median sales price of $442,250, was up $12,250 or 2.8% from last year and at the highest August level of the decade.
  • Sales volume across the DC Metro area was nearly $2.8 billion, up 4.1% from last year.
  • There were 5,064 closed sales in August, down a slight 0.2% compared to last year.
  • There were 4,747 new pending sales at the end of August, down 4.4% from last year.
  • Compared to last August, new listings were up 3.0% to 6,071 compared to last year. This was the highest level of new August listings of the last decade.
  • There were 9,681 active listings at the end of August, down 1.8% compared to last year. This is the 28th consecutive month of declines in year-over-year inventory levels, but it was the smallest year-over-year decline since last September.
  • The average percent of original list price received at sale in August was 98.0%, up from last year’s 97.8%.
  • The median days-on-market this month was 15 days, down three days from last year.

Baltimore Metro Area – Overview

  • The Baltimore Metro area median sales price of $280,000 was a 5.7% or $15,000 increase from last year and was easily the highest August median sales price of the last 10 years.
  • Sales volume of more than $1.25 billion was up 6.7% from last year.
  • There were 3,872 closed sales in August, up 1.8% compared to last year and at the highest August level of the decade, while new pending sales of 3,771 were down 1.6% compared to last year.
  • There were 5,286 new listings that came on the market in August, up 11.3% from last year, and the largest year-over-year increase since March of 2016.
  • There were 10,442 active listings at the end of August, a 3.2% decline compared to last year. Year-over-year inventory levels have declined every month of the last three years, but this month’s decline was the smallest since early 2016.
  • The average percentage of original list price received at sale in August was 96.2%, above last year’s 95.9% and at the highest August level of the decade.
  • Median days-on-market of 22 days was down four days compared to last year and was at the lowest August level of the last 10 years.

Click here to access the full PDF version of this report

About the DC Metro Housing Market Update

The DC Metro Area Housing Market Update provides unique insights into the state of the current housing market by measuring the number of new pending sales, trends by home characteristics, and key indicators through the most recent month compiled directly from Multiple Listing Service (MLS) data in ShowingTime’s proprietary database. The DC Metro Area housing market includes: Washington, D.C., Montgomery County and Prince George’s County in Maryland, and Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City in Virginia. Data provided by MarketStats by ShowingTime, based on listing activity from Bright MLS.

About the Baltimore Metro Housing Market Update

The Baltimore Metro Area Housing Market Update provides unique insights into the state of the current housing market by measuring the number of new pending sales, trends by home characteristics, and key indicators through the most recent month compiled directly from Multiple Listing Service (MLS) data in ShowingTime’s proprietary database. The Baltimore Metro Area housing market includes the City of Baltimore, Anne Arundel County, Baltimore County, Carroll County, Harford County and Howard County in Maryland. Data provided by MarketStats by ShowingTime, based on listing activity from Bright MLS.

About Bright MLS

The Bright MLS real estate service area spans 40,000 square miles throughout the Mid-Atlantic region, including Delaware, Maryland, New Jersey, Pennsylvania, Virginia, Washington, D.C. and West Virginia. As a leading Multiple Listing Service (MLS), Bright serves approximately 85,000 real estate professionals who in turn serve over 20 million consumers. For more information, please visit www.brightmls.com.

About Elliot Eisenberg

Elliot Eisenberg, Ph.D. is the Chief Economist of GraphsandLaughs, LLC, a firm specializing in economic consulting and data analysis. He is a frequent speaker on topics including: economic forecasts, economic impact of industries such as homebuilding and tourism, consequences of government regulation, economic development and other current economic issues. Dr. Eisenberg earned a B.A. in economics with first class honors from McGill University in Montreal, as well as a Masters and Ph.D. in public administration from Syracuse University. Eisenberg was formerly a Senior Economist with the National Association of Home Builders in Washington, D.C. He is a regularly featured guest on cable news programs, talk and public radio, writes a syndicated column and authors a daily 70 word commentary on the economy that is available at www.econ70.com.

Have questions? My contact info is below.

I am always happy to help when I can!

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial Realtor

Bennett Realty Solutions

cell: 202-670-5471 | office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

Tips for Purchasing Real Estate

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Danielle-Gaynor

Danielle Gaynor

Realtor & Investment Consultant

Specialties:
Buyer’s Agent,
Listing Agent,
Commercial R.E.,
Quick Close

Danielle is a young but experienced REALTOR® who goes over and above to help her clients get the best possible outcome with every real estate transaction and reach their end desired goals short term and long term. Danielle works with experienced FHA, VA & Conventional Lender’s, 203k specialists, Real Estate Attorneys and Title Companies. She is Residential Construction Certified (RCC) and an associate member of NAR, MDREALTORS, PGCAR, NAIOP and IREM. Between showing properties and meeting with homeowners (and potential homeowners) to discuss their goals and needs, Danielle operates and manages a small sales team. She is a candidate for her MS in Real Estate at American University in Washington, DC.

To learn more about Danielle, visit her LinkedIn profile www.linkedin.com/in/daniellegaynor/


Danielle J. Gaynor, RCC, MSRE

Residential & Commercial Realtor

Bennett Realty Solutions

cell: 202-670-5471 | office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com

Tips for Purchasing Real Estate, Tips for Selling Real Estate

Why Working with a Real Estate Agent Benefits YOU!

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Have Questions? Contact me directly or submit a question.

Schedule a Free Real Estate Consultation

Danielle J. Gaynor, RCC, MSRE

Residential & Commercial REALTOR®

Bennett Realty Solutions

work: 202-670-5471

office: 301-459-5040

e-mail: daniellegaynorhu@gmail.com