Financial Benefits of Home Ownership

Posted By Wally Reule @ Dec 17th 2014 12:38pm In: Miscellaneous

I just read an interesting article stating that many potential first time home buyers are deciding to continue to rent because home appreciation is less than 10% per year. The author included the following chart, which shows very clearly that even with 4% appreciation over 5 years, the home owner would end up with a nice chunk of equity, especially compared to the goose egg with renting.

Date	1/1/2015		1/1/2016	1/1/2017	1/1/2018	1/1/2019	1/1/2020
Purchase Price	$175,000	Future Value @ 4% Annual Appreciation	$182,000	$189,280	$196,851	$204,725	$212,914
3.5% Down Payment	$ 6,125	Beginning Loan Balance @ 4% Interest	$166,153	$163,069	$159,858	$156,517	$153,039
Loan Amount	$168,875	Net Equity	$15,847	$26,211	$36,993	$48,208	$59,875