The Five Top Benefits of Owning a Home

Read Time: 5 minutes

The US is divided into two camps when it comes to real estate, those who rent and those who own. About 66% of us are homeowners, and that’s not an accident. The legal system, financing standards, tax rules, and social conventions all encourage ownership. 

The easy way to see the top benefit of owning a home is to compare the net worth of owners and renters. According to the Federal Reserve, in 2022 the typical homeowner had a net worth of $396,200 versus $10,400 for renters.

Does this mean owning is always the better real estate option, or that ownership guarantees profits over time? Not at all. There are instances when renting might be preferred, think of someone who will be living in an area for just a few years, an individual who travels extensively, or someone who simply prefers renting.

And when it comes to profits and rising values, there are no guarantees. Real estate is a localized commodity, its value can rise and fall. 

That said, let’s look at the top five benefits of owning a home.

1. Steady Monthly Payments

Both rents and mortgage payments have risen during the past few years, making affordability a major concern for many households. If we look only at monthly rent and mortgage payments, it’s often less expensive to rent than to own.

The catch is that such payments are not apple-to-apple comparisons. Spend $2,000 a month on rent and the money’s gone. The story is different with mortgage payments.

A monthly loan payment typically consists of money needed to pay mortgage principal, mortgage interest, property taxes, and property insurance – what is known as PITI. Each monthly payment means the borrower owes less to the lender.

Over time – usually 30 years – each monthly payment whittles away at the debt until it’s paid off entirely. 

Most borrowers will not keep a mortgage for 30 years because they will move or refinance. However, the benefit of those monthly principal reductions gets passed along in the form of less debt to pay when the home is sold, and thus more cash is available to buy a replacement property.

Figures from the National Association of Realtors (NAR) show that in 2023 first-time buyers purchased with 8% down versus 19% for repeat buyers. 

In effect, a mortgage is a type of savings account that allows you to reduce debt over time. 

2. Owning Free and Clear

It is a fact that many homes are mortgage free. This means owners have no monthly cost for mortgage interest or principal. According to the Census Bureau, 51.4 million owner-occupied homes have mortgages while 33.3 million do not.

Having a home that’s free and clear of all mortgage debt can make monthly budgets much more manageable, especially for those who are retired and have less income. However, owning a mortgage-free home is not just a benefit for senior citizens – among owners aged 34 and under, 1.7 million do not have a mortgage

3. Real Estate As An Inflation Hedge

The Federal Reserve – as a matter of policy – wants to see 2% annual inflation. We don’t know if the Fed will be successful, if inflation will be held to 2% or some other number.

Likewise, we don’t know if inflation itself is a sure bet; after all, we could have a recession. And even if the Fed succeeds with its 2% policy, home values in given areas might move up or down at a different rate.

For example, in the third quarter of 2023, NAR reported that 182 of 221 metro areas saw home values increase while 38 saw declines.

But here’s something we do know: When you buy residential real estate with a 30-year, fixed-rate mortgage, the monthly cost for mortgage principal and interest does not change. Whether inflation rises or falls, whether there’s a recession, at least real estate financing is stable.

If inflation hits, you’re paying the mortgage with cheaper dollars, cash that buys less. If rates go down, you can lock in a lower mortgage cost by refinancing. 

In effect, a fixed-rate mortgage can be a hedge against inflation. This is different from rent, where costs can rise and fall with local market demand.

4. Your House, Your Rules

There are millions of owner-occupied fee-simple properties, homes not governed by HOAs, condo rules, co-op boards, or landlords. With a fee-simple property, you can have a dog or cat, paint the front door any color you like, or plant a garden. 

Most importantly, as a homeowner you can use the property for yourself, rent it, or sell it. You are the decision maker. On the other hand, as a tenant, you don’t have much say, if any. 

The use of fee-simple homes has long been governed by local zoning laws, but now those laws are in flux. Zoning regulations that allow only one unit on a property have been tossed out by many jurisdictions. Instead, property owners are increasingly able to add ADUs – accessory dwelling units. 

An ADU is an independent unit created within an existing home or a separate dwelling. In some cases, more than one unit is allowed on a single property. Such units can be used to create multi-generational housing, home offices, rentals, etc. 

New FHA rules allow lenders to count most ADU rental income when qualifying a borrower for financing, and other loan programs will likely follow suit. While the ADU movement is growing – Freddie Mac estimated there were more than 1.4 million secondary housing units in 2020 – the rules regarding what’s allowed vary by jurisdiction. For details in your area, speak with local builders, brokers, and attorneys. 

5. Tax Benefits

Homeownership has long been associated with several major tax breaks. These federal breaks are available today, but many homeowners elect not to take them. 

In general, owners can write off as much as $10,000 for state and local taxes, the so-called SALT deduction. They can also write off mortgage interest on as much as $750,000 in residential debt ($1,000,000 for married couples and $500,000 for singles for mortgages originated before Dec. 16, 2017). Interest on home equity loans is no longer deductible. 

However, under the 2017 tax code revisions, standard deductions were substantially increased while residential real estate write-offs were reduced. The result is that millions of homeowners no longer itemize. According to the IRS, in 2016 – before the tax code revisions took place – 32.9 million returns included a home mortgage tax deduction.

By 2020 the number of returns with a home mortgage deduction fell to 12.3 million. 

While fewer people use the home mortgage write-off, it does exist. If you live in a high-cost area with a big mortgage and hefty state taxes, you might take it. However, the standard deduction is likely a better option if you have a small mortgage and no state income tax. 

There’s one big write-off for homeowners that remains. If you lived in your home for two of the past five years, you can avoid taxes on profits of up to $500,000 if married and $250,000 if single when you sell.

As always, speak with a tax professional for details and specifics. 

Dan Rafter

Dan Rafter has covered real estate, mortgage and personal-finance news for more than 15 years, writing for the Chicago Tribune, Washington Post, Consumers Digest and many others. A graduate of the University Illinois with a degree in journalism, he is editor of Midwest Real Estate News magazine and blogs on commercial real estate for that publication at, in addition to being a contributor for

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