Want a Good Reason to Buy a Home?

A Great Reason to Buy a House

Homes generally appreciate at about four to five percent a year.  Each year will vary more or less depending on neighborhood or region.  You could compare the investment of a home to investments that get the same or greater return; ie. Stocks, treasury bills or bonds. 

However, it is important to take a closer look.  Say, perhaps, you purchased a home for $150,000.  Presumably, you purchased the house via a mortgage.  Suppose you put twenty percent down—that would be an investment of $30,000.

At an appreciation rate of 5% per year, a $150,000 home would increase in value $7,500 during the first year.  That means with an investment of $30,000 it earned you $7,500!  Your annual “return on investment” would be an incredible twenty-five percent!