If you’re unsure whether to buy one of the available homes for sale in Frisco TX, a report from Harvard University may help you make the decision. Eric Belsky, Managing Director of the university’s Joint Center of Housing Studies, revealed five financial reasons why people should consider buying a home in his paper entitled, “The Dream Lives On: the Future of Homeownership in America.”
Reason #1: Housing is typically the one leveraged investment available.
In his paper, Belsky noted that few households are interested in borrowing money to buy stocks and bonds, and few lenders are willing to lend them money for that purpose. However, homeownership allows households to amplify any appreciation on the value of their homes by as leverage factor. For instance, a 20 percent down payment results in a leverage factor of five, so that every percentage point rise in the value of the home is a 5 percent return on equity. For buyers who put 10 percent or less down, their leverage factor is 10 or more.
Reason #2: You pay for housing whether you own or rent.
Homeowners pay debt service to pay down their own principal. Renters pay down the principal of a landlord (assuming the landlord borrowed money to buy the property), plus a rate of return.
Reason #3: Owning is usually of form of “forced savings.”
Many Americans have trouble saving money. But when you have to make a housing payment, owning a home is one way people can overcome their tendency to defer savings to another day.
Reason #4: Owning a home offers substantial tax benefits.
Homeowners can deduct mortgage interest and property taxes, renters don’t have that option. Landlords are taxed on their rental income, and since they must charge rents in a competitive market, they have to cover those extra costs. Belsky noted that by most estimates the value of not having to pay tax on the equivalent rent for their homes is even greater than the benefit a homeowner gets from the mortgage interest deduction. On top of this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.
Reason #5: Owning is a hedge against inflation.
During periods when home prices and rents are both on the rise, owning becomes a hedge against inflation. When an owner has a fixed-rate mortgage or no mortgage left at all, their housing payments are fixed and only property taxes and utility costs float up or down. And since most of the time, housing costs and rents do tend to go up at or higher than the rate of inflation, owning then becomes an attractive proposition.
If you’re ready to start looking at homes for sale in Frisco TX to buy, one community worth exploring is the Preserve at Lonestar Ranch. Landon Homes offers buyers affordable, energy efficient homes in this master planned community in southwest Frisco. Priced from the high $390’s, you’ll find many different floor plans to suit your style and taste. Lonestar Ranch has a host of amenities too, including a three-tiered resort-style swimming pool, a large clubhouse and fitness center loaded with state-of-the-art equipment. For more information, contact our Internet Sales Manager Tanya Smith at 214-707-0347.