Value of Homeownership
America’s Long Tradition of Homeownership
Commentary questioning the value of homeownership has appeared in a number of media outlets over the past few months. The definition of “value” varies depending on the argument being made. Ultimately, each person who decides to buy a home has weighed the pros and cons and found the prospect of owning their residence to be valuable.
America has a long tradition of homeownership. This country was founded by settlers who braved the wilds, faced the unknown, and claimed a bit of the American countryside for their own. Having a stake in the land upon which we live is rooted in the fabric of the American psyche.
Historically, purchasing a home has been a secure long-term method for accumulating wealth. A majority (79 percent) of all buyers surveyed for the 2011 New Jersey Profile of Home Buyers and Sellers viewed their home purchase as a good financial investment, with 43% reporting it as a better financial investment than stocks. An additional 25 percent of buyers believe their home purchase was at least as good of an investment as stocks. The equity built over time is akin to the extra money you have placed in a savings account for the future, not the fast cash you can get from an ATM for today’s expenses. Unlike the quick money maker the market was perceived to be in the early 2000s, real estate is about long-term investing.
Pride of ownership is a driving force behind the decision to purchase for many individuals and families. For most, the purchase not used solely as an investment vehicle, but as a place to raise a family, grow old, and enjoy the feeling America’s early settlers were quick to embrace – the joy of owning the place you call home. This feeling is difficult to quantify or measure in a graph, so often it is overlooked when discussions of the value of homeownership arise. A great deal of research from government entities, academia and nonprofit groups extolls the societal benefits of owning a home: more stable communities, greater academic achievement, higher property values, and lower crime rates.
Stable, vibrant communities are built upon a mix of homeownership options and rental opportunities that fit different kinds of lifestyles and income levels. Despite all of the financial, emotional and cultural benefits of owning a home, it is not for everyone. Those in a good position to buy must have a reliable income source to sustain mortgage payments and enter the market with a full understanding of the risks, rewards and responsibilities that are inherent in homeownership. For many Americans who are financially capable, the American Dream of owning a home thrives as it has for centuries.