By Marty Kovacs
It’s true that owning a home offers the freedom to create a personal living environment. Yet it means much more to society and the nation.
Indeed, home ownership is an American value. It is the cornerstone of the economy, with the housing sector directly accounting for approximately 14 percent of total economic activity.
Home ownership is a crucial part of growing and maintaining a vibrant middle class.
And, according to studies by the federal Department of Housing and Urban Development and the National Association of Realtors, ownership also is pivotal in building wealth, especially over the long term. Owning almost always makes more sense than renting.
That’s one reason why about 80 percent of the 41.4 million Americans age 65 and older own their home, the highest rate among all age groups. Every state in the nation has an ownership rate of at least 50 percent; nationally, the ownership rate stands at 63.7 percent.
West Virginia, Michigan, New Hampshire, Delaware and Maine have the top rate of home ownership at 70 percent or higher.
Those are the obvious facts and figures. Here are a few of the more nuanced, yet equally compelling benefits of owning a home:
• Homeowners move less frequently than renters, making it easier to build community networks.
• Home ownership yields greater awareness of the political process, higher membership in voluntary organizations, increased church/synagogue/mosque attendance, lower teen pregnancy, higher student test scores by children living in owned homes, a higher rate of high school graduation (which yields added earning power over a lifetime), children who are more likely to participate in organized activities while viewing less television, and better overall physical and psychological health.
But there’s more.
Owning a home has positive tax implications for many families. Over the past 15 years, a Federal Reserve survey found, the net worth of the typical homeowner has ranged between 31 and 46 times that of the net worth of the typical renter.
Data shows that homeowners had nearly $200,000 in net worth or 36 times that of the median renter, who had just over $5,000.
All told, these are some pretty amazing outcomes for a few sticks and bricks.
Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the 9,600-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.