Home sweet home. Home is where the heart is. There’s no place like home.

I could never do justice to all of the emotional merits of home, but I can tell you that owning a home is one of the most important things you can do for building your overall net worth. There are real reasons why many people work hard to save for and buy a home as one of their first investments.

Homes, over time, have kept pace or stayed ahead of inflation so that the value of what you own does not erode, on average. The historical average annual return on real estate is approximately 4%. There are times when homes provide a higher return than 4%, but your ability to capture that return depends on whether you are in a position to sell when the market is up.

Homes also provide a way to help lower your taxes. When you own your home, you can deduct the real estate property tax, some or all of the interest on the mortgage, and the cost of insurance for the property.

If you make a 20% down payment and secure a long-term fixed-rate mortgage (ideally 30 years), you will have the same payment month after month, year after year, which provides many people a sense of security. At first, the mortgage payment covers mostly interest. As time passes, however, more of each payment goes toward paying down the balance or principal of the loan itself. So every mortgage payment is a form of savings because it increases the amount of your home that you own, known as the “equity” in your home.

Making your house beautiful, providing shelter for your family – now I’m back to the emotional reasons why this investment, owning a home, is such an important step for building for the future.

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