Is Huntsville Homeownership A Good Investment In Today's Economy?

As a long-term investment, Huntsville homeownership is still one of the best investments for individual households.



abacusEverywhere you look, headlines say the housing market is in a free-fall, foreclosures are rising at an alarming rate, and mortgage money is so tight that buyers can't get a home loan at any price.



In today's economy, is buying a home and investing in Huntsville real estate a good idea? As a long-term investment, homeownership is still one of the best investments you can make. And the operative word here is "long-term."



Why is Huntsville real estate a good investment, you ask. The housing market, like all markets, is cyclical and will inevitably have ups and downs. But, homeownership has a track record that is virtually unmatched by any other investment of stocks, bonds or mutual funds.



Despite the current unrest in the mortgage industry, if you have good credit, a job and steady income, you will find there is still plenty of mortgage money to be had at decent interest rates. For well-qualified buyers, rates close to historical lows and the new Housing Recovery Act is offering first-time home buyers a $7,500 tax credit.



Homeownership's Real Value



Homeownership is a solid stepping stone to financial security and the single largest creator of wealth for many Americans. Despite cyclical ups and downs, real estate has consistently appreciated over the long-term. The National Association of Home Builders reports home appreciation has, historically, increased 5-6 percent annually.



This may not seem like much, but let's look at some figures that will put it into perspective. If you were to put down the 3.5 percent required by FHA on a $200,000 house, you would put down $7,000. At a 5 percent annual appreciation rate, that $200,000 home would increase in value $10,000 during the first year. Earning $10,000 on an investment of $7,000 is an extraordinary annual return.



In contrast, putting that $7,000 down payment into the stock market and getting a 5 percent gain would only yield a $350 profit.



Compared to Stocks



Looking at it another way, over a longer period of time, if someone put $10,000 into the stock market in 1996, the average annual S&P return would make that investment worth $21,500 today—an increase of $11,500. The median home price in 1996 was $140,000.




Today, that same home would have gained nearly $100,000 in value.


Don't miss out on the benefits of Huntsville homeownership.



For more information on Huntsville real estate, visit MoveToHuntsville.com or give us a call at 256-508-0211.



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