There are six main reasons why home ownership is considered a good investment:

1. Lower taxes. “Homeowners pay for their living space by making mortgage payments to their financial institution or broker instead of paying rent to a landlord,” “This saves them hundreds or even thousands of dollars in income tax – every year.”
2. Deductions. You are usually allowed to deduct the interest on your mortgage payments, as well as your property taxes, from your taxable income as long as your mortgage doesn’t exceed the value of your home. A home is defined as any property that contains a sleeping space, toilet, and cooking facilities. Conventional houses qualify, of course – but so do condominiums, cooperatives, mobile homes, motor homes, and even boats.
3. Additional claims. If you and your spouse buy two houses, you can claim the interest and taxes on one house each. But you don’t have to be married to reap the benefits of this rule. Let’s say you decide to buy a vacation condo with your sister or your best friend. Each of you can deduct your part of the interest. There are some exceptions and restrictions. You’re limited to $1 million worth of tax-deductible interest payments ($500,000 each if you’re married and filing separately). And a few states or regions issue Mortgage Credit Certificates (MCCs), which provide a tax credit rather than a deduction to low-income first-time homeowners.
4. Appreciation. A home can be an asset that tends to become more valuable over time. Prices in the U.S. have risen by three to six percent annually for the past couple of decades. This means if you bought a house for $250,000 12 years ago, you’ll probably be able to sell it for around $500,000 today, resulting in a $250,000 profit.Of course, some properties are more valuable than others. If you’re just about to buy a home, one of the most important predictors of its future value is location. Sometimes it’s better to buy the cheapest house in a good neighborhood than the best house in a less desirable neighborhood. Determine what factors are important to you when you evaluate your potential neighborhood, such as school district reputation, convenient shopping areas, crime risk, local parks, air quality, amount of traffic, and work commute. You might want to drive around a neighborhood you’re considering at different times of the day and different days during the week to get a better feel for the area. If you are wondering about the crime risk in your potential neighborhood, you can contact the local police department and ask for a neighborhood crime report that lists crime statistics for the area.
5. Tax-free profits. In the above example, your entire $250,000 profit on your house is tax-free. “Under current U.S. law,” “you’re allowed to make up to $250,000 on the sale of a principal residence. Couples who are filing jointly can make up to $500,000.” However, you must have owned the property for at least two years and have lived in it for two of the five years prior to the sale to qualify for the tax benefit.
6. Stable expenses. Rent usually increases every year. But if you have a traditional 30-year fixed-rate mortgage, your monthly payment will remain the same.
   

Even if there were no tax advantages or profits to owning your own home, there is another good financial reason to buy if you can afford to: you’ll have a solid asset to show for the money you would otherwise spend on rent. Look at from this point of view, buying a home is like putting extra money in a savings account. Moreover, you’ll have the enjoyment and sense of security that owning a home can bring.

Note: Since tax rules vary by state and personal situation, please consult your tax
advisor regarding deductibility of interest in your case.