There’s no place like home — especially if that home is one you own.
Between building wealth and claiming tax deductions, homeownership has always made sense from a financial investment standpoint. But there are also perks to homeownership that don’t necessarily show up in the pocketbook.
“In the community where I grew up, my friends who had parents who owned houses seemed to me to have different types of life experiences than those of us who rented a home had,” said Trevor Curran, mortgage loan originator at New York’s PowerHouse Solutions Inc. “That was kind of the inspiration and the fuel for me to buy a house when I grew up, as well as my intention to get into the business.”
With the U.S. Department of Housing and Urban Development — and the 64 percent of American households who own homes — commemorating June as National Homeownership Month, Ask a Lender is celebrating the less tangible and more personal benefits of having a home to call your own. Read on to see how being a homeowner can positively impact your health, your happiness, your family and your outlook on life.
Homeownership and responsibility
“The number one benefit, right off the top, is you have a completely different relationship with your finances,” said Curran, “because you own something that, if you don’t pay for it, it’s going to go away and you lose it.”
Curran admits that renters can have a similar perspective but believes that the concept of ownership creates a different relationship with your residence.
“It’s an investment that’s actually your own,” he said, “and that’s the sort of thing that you not only take pride in, but also take more responsibility for.”
Curran recalled writing the check to make his first mortgage payment. “It’s kind of like a splash of water in the face that wakes you up to the reality,” he said. “…You love your home and you love the ownership aspect — and you’re going to do everything you can not only to own it and hold it, but to make it better and to improve it. That’s a great feeling.”
“It’s empowering,” agreed Brooke Burdick, director of community outreach for Habitat for Humanity of Snohomish County in Washington state. “Responsibility is empowering. There’s a tremendous pride in owning and being responsible for a home.”
Burdick said that renters have a lack of control over their residence that homeowners enjoy. “There’s a very positive power in that [control],” he said. “It sort of lifts the spirit of the entire family by living in a home where they can invest in not just financially but emotionally.”
Homeownership and health
Various studies have indicated a correlation between homeownership and better health. A 2014 study in Social Science and Medicine found that homeowners are 2.5 percent more likely to have good health — and 3.1 percent more likely when adjusting for “an array of demographic, socioeconomic and housing-related characteristics.”
Part of that health advantage, according to Burdick, is due to that aforementioned control over your surroundings.
“When you have a rental property with mold or mildew or water damage, that’s not always something that landlords can or will deal with,” he said. “If you’re a homeowner, these are things you have the freedom to take care of when they come up. That’s why we at Habitat think classes to prepare homeowners are so helpful. They can be a real benefit.”
The benefit is just as much mental as physical, added David Burnett, a millennial homeowner who purchased a house with his now-wife three years ago.
“It’s nice to have money go to equity and building security for us versus just going to rent,” he said. “That definitely has a positive mental-health repercussion. And I like working on projects around the house. There’s a stress relief aspect there, and the freedom to do what I want to my home feels good.”
Burnett is not alone. A 1994 report in Housing Policy Debate concluded that homeowners on the whole report higher happiness and self-esteem than renters. That feeling of stability is heightened in circumstances of high stress. A 2012 City & Community study on the impact of the Great Recession, for example, found that although both renters and owners experienced similar levels of financial difficulty, homeowners were less stressed psychologically and felt more satisfied with their financial situation.
Homeownership and education
Habitat for Humanity’s Burdick has found that rental families often have to move a lot, so the kids are constantly changing school districts, which has a real impact on them.
“They very often feel kind of unstable when they’re moving every other year or — in some cases — maybe more often than that,” he said.
A 2009 study published in The American Journal of Economics and Sociology backs up Burdick’s observations, finding that stable housing has a significant effect on the reading and math performance of kids between the ages of 3 and 12. A different study in 2002 quantified those findings, finding that children in owned homes see 9 percent higher math achievement, 7 percent higher reading achievement, and 1 percent to 3 percent fewer behavioral issues than kids living in rentals.
“Homeownership really brings that residential stability that raises educational attainment,” said Nadia Evangelou, a research economist at the National Association of Realtors who co-authored the group’s report on homeownership’s social benefits in 2016. “That’s the most important thing. It brings very positive outcomes in children.”
The benefits of homeownership extend far into the later stages of education, as well. Both Burdick and Curran pointed out that studies have shown a child raised in an owned home is twice as likely to go to college as a child in a rental situation, and Evangelou noted that children of homeowners are less likely to drop out of school.
Evangelou added that recent research has even found some association between the act of saving money and childhood outcomes. “Those behaviors you form saving to buy a house in order to afford a down payment,” she said. “The behavior of the parents can be transferred to their kids.”
Interestingly, a 2010 study found that homeownership seems to encourage good habits from a parenting standpoint as it much as it does educationally. Homeownership and financial stability, the study suggested, may create opportunities for parents to engage in positive behaviors by reducing financial stress and disengagement from their kids.
Homeownership and community
Another benefit of homeownership is the sense of community fostered by the roots that homeowners lay down. Homeowners have a much larger financial stake in their neighborhoods than renters do, and subsequently, studies have shown that they get much more involved in their communities than renters.
“When you walk down the block where everybody owns the house, there is an immediate difference in the quality and cleanliness of that street,” said Curran. “If I own my house and there’s a piece of trash outside my house, I’m cleaning it up. I don’t want it there. I’m thinking about the value of my house and the quality of life for me and my neighbors.”
For Curran, the sense of community fostered by homeownership doesn’t end there.
“I’m meeting my neighbors,” he said. “I’m voting. I’m getting involved. I just feel that people who own definitely have a more assertive attitude towards their community.”
Civic participation is hard to measure, but there is research that backs up Curran’s point of view. A study, issued in 1998 and published in the Journal of Urban Economics a year later, found higher incidences of voting in local elections, awareness of local representatives and membership in volunteer groups in owners compared to renters. A separate study in 2005 asserted an interesting theory: Homeownership serves to facilitate neighborhood interactions because owners see in each other more potential for longer-lasting relationships.
“There’s neighborhood events that our neighbors put on regularly that we like to go over to,” Burnett said. “We know a few people around the neighborhood that we wouldn’t have known when we were renting. The last place that we lived [when we were renters], if we knew anybody, it was because we were obligated to — the HOA president, our landlord, the people directly across from us.”
For Burnett — a millennial who moved to Seattle from Oregon for work — being a homeowner also serves as an emotional tie to his adopted hometown.
“I feel more connected to the city in general because I own a home,” he said. “It’s kind of an ‘anchor keeping you steady in a storm’ sort of thing. It’s a big deal. I appreciate that and I like the stability of it.”
The growth of homeownership also provides a boon to communities by fueling local businesses, added Burdick.
“I know businesses appreciate homeowners because they buy a lot more items for their home, whether it’s furnishings or upgrades,” he said. “They are more likely to spend time and money at local restaurants and other establishments. There’s just a lot more local connection in areas where there’s good homeownership.”
Homeownership and the American Dream
In the midst of the Great Recession, some viewed the emphasis of homeownership as a misplaced priority, baiting unprepared buyers into unsustainable circumstances that fed the mushrooming housing crisis. But as the country has rebounded from the housing crisis blues, owning a home is returning to its position of primacy.
“A home represents safety, security and permanence,” said Burdick, “and having all of those things is healthy, socially enriching and financially smart — and that’s kind of what that dream is about.”
“I think it’s absolutely 100 percent part of the American dream,” he said. “I don’t think anybody’s really saying, ‘I only want to rent for the rest of my life.’” As a recent millennial homeowner, Burnett said that he definitely feels closer to achieving that dream.
“I see it in all the people I help when they buy their first home,” said Curran. “There’s a hunger for understanding. ‘How do I become a homeowner?’ People go to such great lengths to gather information and to prepare because it’s so important to them. You’re not going to fight for it if you don’t really want it.”