Homeowners are Happier
Since reaching a peak of 69.4% in 2004, the U.S. home ownership rate has fallen to 66.9%, the lowest rate since 1999, but that’s a statistic best considered in perspective. The lowest homeownership rate in recent history was 61.9%, set way back in 1960.
That shows that no matter how good or bad the economy is, most people prefer owning their own home. There are good reasons why. According to several studies, homeowners are happier than renters.
The 2010 Fannie Mae National Housing Survey showed that in spite of the ups and downs of the housing market, two out of three households (65%) still prefer owning a home because they believe it's a good investment. Statistics prove that with the exception of the last four year correction from the largest housing bubble ever recorded, home values have rarely fallen, and typically rise one to two percent above inflation annually.
Higher earners choose to own rather than rent. Households with incomes greater than or equal to the national median family income boast a home ownership rate of 81.9%. Households with less than the median family income are less likely to own homes, with a home ownership rate of 51.9%, says the U.S. Census.
Stability is a strong motivation. Non-financial reasons for owning a home such as safety (43%) and the quality of schools (33%) were also important reasons given for preferring owning to renting. Homeowners with traditional, fixed-rate mortgages were more satisfied with homeownership than those with less predictable non-traditional mortgages, found Fannie Mae.
Homeowners move less frequently and tend to integrate better socially into their communities. They do more volunteering to support their communities, form more crime prevention coalitions, and tend to vote in local and national elections more frequently than renters, says new research from the National Association of REALTORS®.
Using research pulled from the government, industry and academia, the NAR’s Social Benefits of Homeownership and Stable Housing report finds a direct correlation between home ownership and educational achievement, as frequent moves tend to impact a child’s educational outcome negatively.
Homeowners also tend to have higher self-esteem than renters, and overall better health, both physically and psychologically, says the report. They have more concern for neighborhood property values, and tend to take more action to maintain or grow perceived property values.
Neighborhoods with a high rate of home ownership are safer to live in because homeowners have a stronger social network and can more easily recognize perpetrators. They also show their neighborhood pride through better home maintenance, which improves the quality of the community.
Neighborhoods that “display social disorganization” and poor maintenance tend to be greater targets for criminals. See: www.realtor.org/research/research/reportsbuysell.
These reports may answer the question why the government supports home ownership through tax credits, tax benefits, energy rebates and other benefits. Helping citizens establish stronger, well-maintained communities raises the quality of life for everyone.
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