With great concern about whether the American dream of home ownership would be sustainable, recent evidence points to a rapid recovery for the desire of home ownership. As uncertainty diminishes and the economy continues its path to recovery, it’s likely that more and more people will once again move towards home ownership. With the changing sentiment, it’s important to remind buyers who have delayed purchasing a home about the many benefits of home ownership. These include the following:
- Pride in ownership. People have always been proud of being able to say they own their own home. Sometimes this carries over to statements about owning a second home or a vacation home. Alternatively, how often have you heard someone say, “I’ve been renting my home for 10 years now.”
- Perception. People perceive a “renter” as being temporary and sometimes make less of an effort with tenants than they do with homeowners in the neighborhood.
- Personalization. When a home is yours, the money and time you put in the home are a reflection of who you are. It’s not the same when you rent. Making expensive improvements that benefit a landlord is impractical and ill-advised.
- Sense of accomplishment. People tend to believe that you haven’t really “arrived” or “made it” until you own your own house.
- Long term investment opportunities. A home is not a car, it doesn’t depreciate. Even in the worst of times, your home will eventually appreciate in value. For most homeowners, their home becomes their single greatest asset. Compare the Forced Savings Plan and thirty-year fixed costs to having no asset after paying ever increasing rental rates year after year. Increase your own wealth or make your landlord wealthy. The choice is obvious.
- Sense of belonging. One of the fundamental human needs is a sense of belonging (social needs). If everyone else in the neighborhood owns and you don’t, then you’re not likely to fit in as easily.
Finally, it’s inevitable that you will own if you can afford it. If you wait for values to appreciate and mortgage interest rates to increase, you may not be able to afford a home. But if you can afford it, it may cost a lot more in the near future.