Owning a home is cornerstone of the American Dream
By KRISTI BAILEY
There is an ongoing debate in one corner of the policymaking world about re-evaluating the role of homeownership in the American Dream. It is an extension of the loss of about $7 trillion in home equity during the Great Recession, which made some ask if policymakers put too much faith in the benefits of homeownership. The long-term effects of record-low mortgage rates and over 4 million mortgages in forbearance via the coronavirus economy have been added to the debate. The question is: Should there be more focus on other aspects of upward mobility and admit that homeownership is not for everyone?
The debate may be interesting to some, but if you want to test what the public thinks, ask renters and those who are still living with family members. The National Association of Realtors® (NAR) surveyed this group in their Housing Opportunities and Market Experience survey.
According to NAR, when non-homeowners were asked for the main reason why they currently did not own a home, most respondents cited mortgage affordability. The big picture from the survey and other NAR surveys is 75% of non-homeowners, and 90% of current homeowners said homeownership is essential to the American Dream.
June is National Homeownership Month. So, despite the stain of doubts by some, homeownership commitment is an essential option for many Americans to invest in their communities, build wealth, and achieve the American Dream remains strong.
There is no question the economic aspects of homeownership get most of the public attention. So, what better time than National Homeownership Month to pause and look at the other side of the homeownership story.
A couple of years ago, a research economist at the NAR wrote a white paper that sheds some light on the often-overlooked facets of homeownership. It pointed out that in addition to tangible economic benefits, research has shown that homeownership brings substantial social benefits for families, communities, and the country as a whole. These societal benefits are just as much of the motivation for policymakers to promote homeownership as the economic advantages. Simply put, homeownership provides much of the societal glue for healthier communities on both the financial and social sides of the ledger.
Here are some of the often overlooked but documented social benefits of homeownership:
- Increased charitable activity.
- Civic participation in both local community and national issues (including voting).
- Greater awareness of the political process.
- Higher incidence of membership in voluntary organizations and church attendance.
- Greater attachment to the neighborhood and neighbors.
- Lower teen pregnancy by children living in owned homes.
- Higher student test scores by children living in owned homes.
- Higher rate of high school graduation, thereby higher earnings.
- Homeowners take on greater responsibility, such as home maintenance and acquiring the financial skills to handle mortgage payments and those skills transfer to their children.
- Lower teenage delinquencies.
- Homeowners reported higher life satisfaction, self-esteem, happiness, and more perceived control over their lives.
- Solid wealth gains for homeowners under normal housing market conditions.
- Homeowners not only experience a significant increase in housing satisfaction but also obtain a higher satisfaction even in the same home in which they resided as renters.
- Homeowners better maintain their homes, and high-quality structures also raise mental health -renter-occupied housing appreciates less than owner-occupied housing.
- Housing prices are higher in high-ownership neighborhoods.
You can explore more aspects of homeownership at Home Ownership Matters at homeownershipmatters.realtor and HouseLogic at houselogic.com.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in Northeast Tennessee, Southwest Virginia region representing over 1,300 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries.