There are numerous benefits to homeownership beyond just the sense of achievement and personal gain.Owning a home can have positive effects to not only your financial ego, but also your financial health, including taxes, long-term savings, and even future investment potential.

Equity

Though it is certainly market-dependent, it is typically accepted that property value increases 5% on average per year.With that in mind, your first home can build equity in many ways. If your home is in a great location (or you happen to stumble upon a home in an area that becomes a great location over time), local market conditions may influence increased value to your property. Additionally, you may also build equity as you manage your payments and maintain the condition of your home properly. In the very least, inflation could make your home more costly for a new buyer to purchase than what you originally paid.

You may be able to tap the equity in your home for a number of major expenses during your lifetime, including college tuition for your children, or your own retirement planning. The equity of your first home may also be a source for future property investment. Though potentially risky, some consumers use some of the equity gained during the recent housing boom to start a stock and mutual fund investment portfolio.

Taxes

The interest paid on your mortgage is tax deductible on state and federal taxes. This can offset any major earnings or additional income streams. Depending on the type of loan you have, the deduction may decrease over time, but it is still helpful.

Freedom from the Hassles of Renting

The benefits gained from leaving the renting world and becoming a homeowner can be two-fold. If you have a fixed-rate loan, then you will come to expect a stable cost for your housing every month, and not have to deal with the fluctuations you would typically expect by being a renter.The payment may also be lower than the rents in your area.

Overall, whether your first home is a single-family suburban house or a metropolitan condo, you will have a place that is all your own without the constraint of rental leases, residential managers, or any of the other hassles experienced while renting.

At the same time, there are expenditures of money, time or responsibility that some find too costly to bother with property ownership. To find out more, see the alternative to this article--- the "Costs of Homeownership"

References

Neighbor Works America. Realizing The American Dream

Freddie Mac. Avoiding Foreclosure

Freddie Mac. Don't Borrow Trouble

Freddie Mac. Buying and Owning a Home

Credit Union National Association. News Now