To Buy or Not to

Homeownership has long been regarded as one of the key elements of the American dream. The reasons for America's love affair with homeownership are many. Some are financial. Our tax code continues to subsidize heavily the ownership of homes, making it more attractive than renting for most people. Homeownership is also America's favorite forced-savings and investment plan, with an increasing share of the monthly mortgage payment going into the building of equity for future uses— another home, college expenses or retirement, for example. A home is truly the only investment you can live in, and over the past 50 years or so, it has been an investment that's generally performed well, relative to alternative uses of money.

But much of the motivation behind homeowner-ship is psychological. This country was founded on principles of individual destiny, personal control over one's life and surroundings, and freedom of individual expression. A home of one's own helps fulfill all those promises, making the owner free from rent hikes and landlord's whims, and free to live life as he or she wishes. A home can provide a sense of security and pride. A home gives a feeling of stability and commitment, not to mention autonomy and privacy. It is often the first step a person takes to put down roots in a community.

But like most freedoms, those that come with homeownership also carry heavy responsibilities—not only financial obligations but also the duties of maintenance, record keeping, and planning.

Before you dive into the search for a home, examine your motives, clarify your wants and needs, and focus your investigation.

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