Nothing But the Truth

By President-Elect Gary Thomas, National Association of REALTORS®

There is a persistent truth about home ownership.

No matter how difficult the last few years have been, and no matter how much of a battering the housing industry takes, Americans still want to be homeowners.

A New York Times/CBS News poll earlier this year said that 89 percent of all Americans continue to see home ownership as an important part of the American Dream.

That’s in large part because our homes are the place where we settle down, raise our children, relax and live out our lives.

And it’s still hard to beat a house as a long-term investment.  Home ownership is a contributing factor in building long-term wealth.  Historically, a home owner’s net worth has ranged from 31 to 46 times that of a renter.

There are also numerous social benefits to home ownership.  People who own homes are more involved in their communities.  They vote more, volunteer more and contribute more to their neighborhoods.  Even better, their children do better in school, stay in school longer and are more likely to participate in organized activities.  As a result, they spend less time in front of the television.

Home ownership even contributes to a better quality of life.  Research shows that home owners are happier and healthier.  They enjoy more freedom in redecorating and renovating their house to meet their needs.  Housing costs are more stable for home owners than for renters, and they can usually deduct mortgage interest and property taxes on their federal individual income tax return—an issue that will come up very soon as tax day draws near.

All in all, Home Ownership Matters!  Truer words were never spoken.

  1. Thomas Lawler

    Homeownership where owners have positive and significant in their homes is the critical focus of sustainable homeownership. Higher down payments for potential home owners who want a 30-year mortgage obviously makes sense. But for potential buyers who don’t have a good sized down payment, the “right” mortgage for them that would build equity over time without relying on inflation/home price appreciation is a mortgage whith a shorter amortization period than a 30-year mortgage — sorta like the the “typical” mortgage back in the 60’s, before inflation kicked up. For borrowers, who don’t have much of a down payment, a 20-year mortgage makes more sense, and possibly even a 15 year mortgage. Sure, a borrower unable to make much of any down payment can’t “afford” as large a home; But that’s sorta “duh'” Folks shouldn’t rightly buy a home that is more than, saly, 3 times their sustainable income if the don’t have the ability or willingness to make a good sized down payment. Sustainable home ownership means buyers in most scenarios over time have significant equity in their homes. That is the learning of the horrible housing crash. I agree with you that homeownership is a “good thing,” if one defines it as “sustainable” homeownership, which requires a homeowner to have significant positive equity in his/her home in most scenarios over time.

    Your implicit call for shorter amortization mortgages for borrowers with modest down payments seems right on.