The American dream is to own a home, but many individuals are skeptical of purchasing a home due to the collapse of the market. Research shows that the demand for home purchases peaked in the early 2000’s and lenders made “non-traditional mortgage options with low interest rates that later ballooned the payment to two or three times the starting size within two to five years” (Corbett, 2011, p.16). As a result, unqualified buyers qualified for larger loans that over time they could not afford. Many homebuyers did not read the fine print or ask questions about the loan they had secured or the interest rate they were responsible for paying. Additionally, many independent brokers misled their clients away from traditional loans in favor of high-risk loans so they could receive bonuses themselves. Unfortunately, “the Federa...
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As a result, many first time buyers use this tax break to move to upgrade to larger homes. A home can provide stability to individuals who have fixed rate mortgage payments, unlike renters whose monthly payments can increase at any time. The importance of owning a home goes beyond the financial benefits; there is pride in ownership, a feeling of independence, and a commitment to a community. Unfortunately, there are some drawbacks of homeownership. Buying a house is not for everyone, especially if an individual does not plan to live there for at least 5 to 7 years. Consequently, a home is not a good short-term investment because the transaction costs are too high, resulting in paying more to sell than a homeowner will gain. Additionally, houses are time-consuming and the maintenance is an ongoing task that is exhausting and extremely expensive.
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