Why Owning A Home Is One Of The Strongest Ways To Establish Wealth

Owning a home is a cornerstone of the American dream. The run-up in home prices during the housing bubble of the 2000s led to its crash and nearly a decade of sluggish housing demand. Buying a home is expensive and comes with risks. But as with most things, there are upsides to owning a home.

In addition to the obvious tax advantages and the fact that your money is going towards something you can call your own, home ownership also can play a significant role in improving your financial security in the long term.

If you’re renting, it’s easy to let your money sit there. You don’t have to think about where it’s going or what it’s doing for you. But if you own a home, you must maintain it and pay for property taxes and insurance. That means every month, a certain percentage of your income is going towards something that will grow over time, meaning that as time goes on, it will be easier for you to build equity in the house instead of just letting money sit there.

Over time, building equity allows you to borrow against the value of your home and use those funds for other investments or purchases. You might be able to take out a home equity loan or a home equity line of credit, which are both ways to get cash out of your house. The benefit is that you don’t have to pay interest on the money you borrowed because it’s tied to the value of your home.

If you want to take out a home equity loan, for example, you’ll borrow up to a certain percentage of the value of your home and then pay it back over time with interest. With a home equity line of credit, instead of borrowing a fixed amount upfront and paying back with interest, you can borrow as much as you need over time (up to a specific limit) and pay it back without interest.

The problem with these loans is that they can be expensive – sometimes more expensive than other types of loans. And if you miss payments or don’t pay off your loan in full when it comes due, then some severe penalties are involved.

This is a great way to finance investments or purchases you can’t afford to buy outright. But it’s important not to use your home equity for frivolous things. It’s there in case of an emergency or for something that will make your life better in the long run.


The benefits of home ownership go beyond the financial. If you own your home, it’s yours. You can fix it any way you want and make it your personal space. You can paint it any color you desire or put it in a new kitchen, or add a pool out back. 

The downside of owning a home is that it costs money to buy and maintain it over time. But for most people in their 20s and 30s, buying a house is probably the best investment they can make because of how quickly homes appreciate over time. If you believe in a place now and hold onto it for 20 years or more, chances are that when (or if) you sell it, the value will have increased dramatically from when you bought it.