Final answer:
Buying a home allows one to build equity, which is the monetary value of the home minus the outstanding loan amount. It offers security, potential tax deductions, and can increase self-esteem.
Step-by-step explanation:
Buying a home, as opposed to renting, allows one to build equity. Equity in a home is the monetary value that the owner would have after selling the house and repaying any outstanding bank loans used to buy the house. It represents the difference between the value of the home and the remaining loan amount. By making improvements and payments over time, homeowners can increase their equity in the home. This can be a valuable financial asset, as it provides a sense of security and can lead to tax deductions. For example, homeowners can deduct their mortgage interest on their taxes. Additionally, building equity in a home can contribute to one's self-esteem by owning a valuable asset.