What is the real advantage of home ownership anyway?
I'm so glad you asked. Here are some facts that will help to answer your question. Even considering periodic adjustments in local markets in response to economic conditions, over the long-term, real estate has consistently appreciated by 5-6 percent annually, on a national level, according to economists at the National Association of Home Builders (NAHB).
That is a huge advantage! Wouldn't you say? 5% may not sound like much, at first, but here is an example from the NAHB's website that will put it into perspective for you: "Say you put 10 percent down on a $200,000 house, for an investment of $20,000. At a 5 percent annual appreciation rate, that $200,000 home would increase in value $10,000 during the first year. Earning $10,000 on an investment of $20,000 is an extraordinary 50 percent annual return." Thus, in only 2 years you would have the same amount of equity as your initial investment in the home.
The same NAHB economists want to point out that, "In contrast, putting that $20,000 down payment into the stock market and getting a 5 percent gain would only yield a $1,000 profit." Wow, that puts it into perspective! Now I have a question for you. Where would you rather invest your $20,000?
This article brought to you by the PJ'S Team at Miller Housing Group.
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