The economy is sick, and real estate is still dragging.  Home owners are nervous, and many of them are in distress. Is the American Dream dead, or is it just snoozing? What is the future of home ownership?

Reliable sources say it’s not over yet.  Homeowners are happier and healthier than non-owners, says a recent report by the National Association of Realtors® (NAR).  But can you believe them? They have an obvious vested interest. But still, their survey shows interesting results, as do other objective sources.

Social and personal benefits of home ownership:

1. Healthy!  Homeowners enjoy a higher level of physical and mental health than renters.
2. Satisfied! They are more satisfied with their lives than renters.
3. Stable! Home ownership provides social stability, since owners move less frequently than renters. Owners tend to be older, married, and therefore more committed in every way.
4. Safe! Areas with high owner occupancy experience less crime. While no one likes crime in their neighborhood, homeowners have an interest in keeping property values up and are more likely to participate in crime prevention programs and neighborhood watches.
5. Not Pregnant!  Homeowners’ children have a lower rate of teenage pregnancy.
6. More Parties! It's easier to have late parties at your house than a rental.

I didn’t make these up – except the last one.  The bottom line of this study is that there are immeasurable social benefits to families, neighborhoods, and the country as a whole. You can view the entire article here. 

Does It Pay? Let's look at some of the financial benefits

1. Rents go one way – up.  Owning freezes your housing cost especially when you get a fixed mortgage at today’s shockingly low interest rates.  That’s less than $2400 per month for a $500,000 mortgage*.  Check out what you kind of property you can rent for that, and then consider what that rent might be in 10 years. *based on interest rates of 4% available as of late Dec. 2011.
2. A mortgage is a long-term forced savings. Even in these times of reduced home values, home ownership is a stable investment compared to stocks. In the long term (5+ years), home values are far more likely to rise than fall.
3. A home is an investment you can live in. As always, check with your financial planner or tax advisor to learn what is best for your situation.
   
   
   

              
   
   
   
4. Stop paying your landlord’s mortgage. He may really appreciate you, but wouldn’t you rather be paying your own mortgage? After all, you are paying someone's mortgage - just not your own - when you rent.
5. Swamped by the cost of out of state college for your kids? Buy a condo for your student, rather than pay the dorm and meal costs.  When they graduate, you will have an asset - not just a bill. If you need a referral to a superior Realtor in another area, email me.

The Washington Post recently wrote a column on this topic, see full story here.

• Community Pride: Owners have a sense of responsibility for their home and community, and are more involved in local politics and community happenings.
• Have More Fun! Homeowners tend to have more social ties than renters, as they have time to create lasting relationships.

 

• Is It Inherited? Home ownership seems to “run in families”.  Children of owners are more likely to absorb the money management skills from observing parents budgeting in good times and bad. 
• Sweet Freedom: Homeowners get to make their own rules. Unshackle yourself from your landlord’s whims– within limits of course.

Love animals? In Hawaii finding a pet-friendly rental can be an enormous challenge. Buy a house for your dog, if not for yourself! See more advice on animals and housing here.

For the complete text of the New York Times article, In Defense of Home Ownership, click here.

The US Census Bureau reports that nationwide, 64.5%% of US households own their own home as of 2010, up slightly from 10 years ago.  Hawaii is near the bottom of the state-by-state list, at a 50.7%. Wikipedia has some interesting detailed charts here.

The international statistics there show that we have a ways to go compared to many other nations.

 

Economic and Tax Issues

Economists agree that the economy won't improve until the housing industry bounces back.  And without the mortgage interest tax deduction many more homeowners would sink. If you agree, write to your congressman in support of the many benefits of continuing this tradition of supporting home ownership. You can click here for the links to your congressman. 

Here's wishes for a Healthy, Happy, and Safe 2012 in your own Home!

Your comments are appreciated, but if you wish a personal reply please email in the space to the right, as I cannot respond to comments posted below. Thank you.

© 2011. Stephanie Gieseler, Honolulu, Hawaii. All rights reserved.