I just read an article in Money Magazine by the Wall Street Journal. The writer James B. Stewart is a winner of a Pulitzer Prize and just wrote a new book called “Tangled Webs”. His article is what I want to talk about today.
In Mr. Stewart’s article he feels home ownership may not always be a sound financial decision. He does say that home ownership perhaps provides stability in our country because countries that are less stable have less home ownership. I do agree over the last couple of years its hard to say its good to own a home. But as this weekends Gazette pointed out for Colorado Springs, homes had appreciated on average 20% over the last 10 years. Its been slow but it’s a gain. If your home was $100,000 in 2000 its work at least $125,000 compounded. If you had 100K of stock then, I think it would be worth less than 100K now. Second he fails to point out that buyers over bought in the boom years. He does point out, accurately, that folks need to buy within their means. And this is the crux of everything Buy within your means. Buy Resale. Buy Foreclosures. People have to live somewhere so why not own it.
Owning a home gives you a forced savings account. Mr. Stewart does acknowledge this. Owning allows for tax benefits. Owning and staying builds equity. We use to stay in our homes 7.3 years. Over the last 10 years it has dropped to 4 years. Stay longer and enjoy the benefits.
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