Our spring season was crazy—but why? Homeowners are realizing the tax advantages of owning a home.
Thank you for joining me for another Hot Off the Press market report. We had an incredible spring, where 90% of the metro areas are boasting year-over-year gains. Why is this happening?
Buyers are starting to realize the tax advantages of homeownership right now. I looked at the four major tax advantages of home ownership, according to the Tax Policy Center’s Briefing Book.
1. Mortgage Interest Deduction. “Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage.”
2. Property Tax Deduction. “Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”
3. Imputed Rent. “The return on homeownership is excluded from taxable income.”
4. Profits from home sales. “Homeowners may exclude from taxable income up to $250,000 of capital gains on the sale of their home.”
Americans still think that real estate is the American Dream. 34% believe that real estate is the best long-term investment.
Why are prices going up? It is generally a result of supply and demand. As a nation, we are at 3.8 months of inventory. That’s nothing! That’s what’s driving prices up, but not in every price range.
Right now, we have way less than six months inventory for first-time buyer homes, so we have a seller’s market. A little more inventory for move-up homes will bring it closer to a neutral market. In the premium market, we’re in a buyer’s market because we have more than seven months of inventory and in our area, more than nine months of inventory.
June is our “Celebrate National Homeownership Month.” Homebuyers want more privacy, a place for their family to grow, some stability, control over their future, and putting their hard-earned money to work for them.
Homeowners: if you have any thoughts about moving, you need to get started now. There’s not a lot of inventory on the market. In the next few weeks, we’ll talk about some great tips for homeownership.
If you have any questions or you’re looking to buy or sell a home, give me a call. I’d be happy to help!