Most Americans believe that home ownership makes dollars and “sense.”

 

In a new survey by Bankrate.com, 92 percent of Americans surveyed believe that purchasing a home is a good investment for the future. Bankrate, Inc. is one of the Web's leading aggregator of financial rate information, attracting 7 million unique visitors to its site monthly. For this survey, Bankrate commissioned Princeton Survey Research Associates International to ask Americans about finances and family life.

 

While 9 out of 10 respondents believe a home is a good investment, only 4 of 10 believe that the stock market is a good long-term investment. Home ownership won out, in spite the fact that the stock market has a higher rate of annual return. As measured by Standard & Poor’s 500, the average annual return on residential real estate over the last three decades was 5.92 percent versus 12.33 percent for the stock market, according to the Journal of Portfolio Management.

 

But a 6 percent annual appreciation for the home your family lives in definitely beats throwing away your money by renting. Then, when it comes time to sale, as long as you have lived in your home for two years, you can deduct up to $250,000 (married, filing jointly) from your federal income tax of any capital gain from the sale of your principal residence. Additionally, there is the financial plus of being able to deduct mortgage expense and property taxes from your income tax.

 

Owning a home definitely makes dollars and “cents.”