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The Long-Term Benefit of Kalamazoo Homeownership: The Security of a Roof Over Your Head

Your Digital Home Advisors

by zac folsom

The Long-Term Benefit of Homeownership

Today’s cooling housing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.

Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time.

The National Association of Realtors (NAR) explains:

“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth Over Time



Even though home price appreciation has moderated this year, home values have still increased significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy those gains have been over the last five years.

If you look at the percent change in home prices, you can see home prices grew on average by almost 64% nationwide over that period

That means a home’s value can increase substantially in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains you stand to make become even clearer (see map below):

The second map shows, nationwide, home prices appreciated by an average of over 290% over roughly a thirty-year span.

While home price growth varies by state and local area, the nationwide average tells you the typical homeowner who bought a house thirty years ago saw their home almost triple in value over that time. This is why homeowners who bought their homes years ago are still happy with their decision.

Even if home price appreciation eases as the market cools this year, experts say home prices are still expected to appreciate nationally in 2023. That means, in most markets, your home should grow in value over the next year even if the pace is slower than it was during the peak market frenzy when prices skyrocketed.

The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and fight annual lease hikes for no long-term financial benefit? Instead, consider buying a home. It’s an investment in your future that could set you up for long-term gains.

You Enjoy Significant Tax Deductions

Owning a house can reduce the number of taxes you pay yearly. Your mortgage interest and property taxes in some cases can be deducted from your federal taxes, as well as most state and local taxes. Certain closing costs and loan discount points may also be deductible.

Financial strength

Most people know that buying a home is a great investment. In addition to the obvious benefit of having a place to live, owning a home can also have positive effects on your finances. If you are a first-time homebuyer, purchasing a home can strengthen your financial portfolio and help your money find its way back into your pocket.

Most people understand that a mortgage is a loan used to purchase a house. The monthly payments on the loan steadily accumulate equity, meaning that the borrower slowly but surely owns more and more of the property each month. renters, on the other hand, simply hand their hard-earned money over to their landlord with no hope of ever seeing it again.


So, what are some ways to rapidly increase your equity? One option is to make extra payments on your mortgage each month. Even an additional $100 per month can make a big difference over the life of a 30-year loan. Another option is to refinance your mortgage at a lower interest rate, which will reduce your monthly payments and allow you to pay off the loan more quickly.

Whatever route you choose, remember that increasing your equity is one of the smartest financial moves you can make.

Where to Go From Here

Don’t let the shifting market delay your dreams. Data shows home values typically appreciate over time, and that gives your net worth a nice boost.