Promoting Home Ownership

Quick Takeaways

The benefits of purchasing and owning your place of residence are both financial and emotional – pride in homeownership and the feeling of security are huge intangible benefits.
An obvious financial benefit of homeownership is the appreciation of your home over time. Housing markets do move in cycles, but houses will almost always appreciate to some degree over time.
Other benefits include property tax deductions, capital gains exclusion, and other preferential tax treatment.

Source: 8 Reasons to Buy a House (The Balance, Nov. 10, 2021)

The community benefits of homeownership can take many forms. It has often been found that owners are more likely to upkeep their homes and yards, raising property values and impressions of neighborhoods and communities. Living in one place for a longer amount of time creates and obvious sense of community pride, which may lead to more investment in said community.

Families also benefit from homeownership, with studies proving that parents are able to spend less time in a stressed state, therefore spending more time with their children. The ability for parents to feel stable has a huge impact on children’s behavioral issues, educational success, and future economic success.

The financial benefit of homeownership is undeniable, and certainly the easiest benefit to demonstrate. On national level, homebuyers who purchased a home 10 years ago have gained an average of $225,000 in equity if their home sold for the average price.

See References for more information.

References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.

Community Benefits

Homeownership in the Black Community is a Mental Health Issue (Technically, Sep. 14, 2022)

“Homeownership in the Black community is a mental health issue: For too long, we have lived in spaces that are not in our control,” she said. “We don’t realize the burdens we’re carrying because we don’t control the spaces we live in. Your baby kicked a hole in a wall and you’re scared to death that you might be evicted because we are seen as ‘thugs.’ Kemp said while Blacks make up roughly 6% of the city’s population, nearly all of the defendants in eviction court are Black or brown — a story explored in-depth in Matthew Desmond’s 2016 bestseller “Evicted,” which examined poor renting families in Milwaukee.”

How Homeownership Changes You (The Atlantic, Apr. 11, 2022)

“Committing to owning a house can also tie people more closely to a place. Nelson, who works for a tech start-up, told me that after moving frequently during childhood and hopping from rental to rental in their 20s, they find homeownership “very calming” at age 31. It has also led them to wonder, “Now that I’ve settled and claimed this little piece of land, what am I going to do to invest in my community?” One of Nelson’s answers has been to devote about 10 percent of their disposable income to local nonprofits.”

Investing in Communities: Social and Personal Benefits of Homeownership (Source Weekly, Jan. 5, 2022)

“To understand the impact on a community when there are roadblocks to ownership, it's significant to look at the personal and social benefits of homeownership. A home will provide an individual a stronger sense of security, belonging and attachment to the home and the community. When people have a place that is their own, it can be conducive to opportunities for growth physically, mentally and emotionally. Being a homeowner is a source of pride and worth, a tool for advancement.”

Social Benefits of Homeownership and Stable Housing (National Association of REALTORS®, Dec. 2016)

In 2016, the National Association of REALTORS® Research Division released a report entitled “Social Benefits of Homeownership and Housing.” This paper serves as a review of existing literature regarding the ways in which homeownership affects educational achievement, civic participation, health, crime, public assistance, property maintenance and improvement.

Family Benefits

What are the benefits of homeownership? (Habitat for Humanity® East Bay/Silicon Valley, Jun. 26, 2023)

In fact, our Social Impact Study showed that, after moving into their Habitat East Bay/Silicon Valley homes:

73% of homeowners reported being able to build their savings
87% of Habitat kids graduated from high school
98% of homeowners are now proud of where they live
70% of homeowners saw an overall improvement in health problems like asthma, allergies, or mobility limitations.
99% of homeowners say they now reduce, reuse, and recycle

Consumers’ Homeownership Aspirations Remain High Despite Higher Home Prices and Interest Rates (Fannie Mae, Jun. 6, 2023)

[A] “survey asked consumers to consider the financial and non-financial (or lifestyle) benefits derived from either owning or renting. Respondents overwhelmingly indicated that owning a home was preferable to renting in every aspect listed. The top three were having control over what you do with your living space (94%) to having a sense of privacy and security (91%) and having a good place for your family or to raise your children (90%) – all of which were essentially unchanged from the 2020 survey. "Having less stress" brought up the rear at a still-commanding 66%, up 10 percentage points from 2020.”

Stable Housing is Foundational to Children’s Well-Being (Center on Budget and Policy Priorities, Feb. 15, 2022)

“A broad body of research links homelessness, housing instability, overcrowding, and poverty to adverse effects on young children’s health, development, and future school performance. Frequent, prolonged, or acute hardship in early childhood can permanently affect development of the brain and related systems. Housing instability creates significant stress for all members of the household and can strain relationships between adults and children or other adults.”

Financial Benefits

Rethinking Homeownership as “the American Dream” (Urban Institute, Jun. 26, 2023)

“According to Black Knight’s Home Price Index, the average seasonally adjusted US home price increased nearly 80 percent from April 2015 to April 2023. Homeowners realized significant wealth increases while renters were left out.”

Are There Credits for First-Time Homebuyers? (Investopedia, Nov. 15, 2022)

“Homeownership remains a vital part of the American dream. Maybe that's why there are a host of incentives designed to make it easier for first-time homebuyers to afford a place. These incentives include federal and state grants, tax credits, and other options. Even if you've owned a home in the past, you may qualify for these programs if you meet specific guidelines.”

3 Ways Homeownership Can Build Wealth (Forbes, Aug. 3, 2022)

Even with market ups and downs, homes do generally appreciate in value, especially in the long run. Though the exact amount depends on location, size of home, etc., the average appreciation rate nationals is “around 3.5% to 3.8% per year.” Paying into your mortgage, versus a landlord’s, builds equity. Home ownership also opens you up to new tax deductions, among other, more intangible, benefits.

Owning vs. Renting: The Benefits of Residential Stability (Housing Studies, May 2022)

“In housing research, owning, as compared to renting, is generally depicted as more desirable and associated with better outcomes. This paper explores differences in outcomes between owners and renters in 25 European countries and whether these differences are systematically smaller in countries in which owners and renters have more similar levels of residential stability (smaller tenure length gap). The results indicate that the direction of the relationship between tenure type and the selected outcomes is largely similar across countries. Owners generally exhibit more desirable outcomes (including life satisfaction, civic participation, educational outcomes for children, and physical and mental health).

Single Family Homeowners Typically Accumulated $225,000 in Housing Wealth Over 10 Years (RISMedia, Jan. 31, 2022)

“Homeownership is the largest source of wealth among families, with the median value of a primary residence worth about 10 times the median value of financial assets held by families. Housing wealth (home equity or net worth) gains are built up through price appreciation and by paying off the mortgage. At the national level, a homeowner who purchased a single-family existing home 10 years ago would have gained $225,000 in home equity if the home were sold at the median sales price of $363,100 in 2021 Q3.”

Key Elements of the U.S. Tax System (Tax Policy Center, May 2020)

“Homeowners may deduct both mortgage interest and property tax payments as well as certain other expenses from their federal income tax if they itemize their deductions. In a well-functioning income tax, all income would be taxable and all costs of earning that income would be deductible. Thus, in a well-functioning income tax, there should be deductions for mortgage interest and property taxes. However, our current system does not tax the imputed rental income that homeowners receive, so the justification for giving a deduction for the costs of earning that income is not clear.”

eBooks & Other Resources

Homeownership Built to Last (eBook)

A Place Called Home (eBook)

Chasing the American Dream (eBook)

Wealth and Homeownership (eBook)

Homeownership Education Series (Freddie Mac)

Home Ownership Matters (National Association of REALTORS®)

Benefits of Homeownership [Infographic] (National Association of REALTORS®)

Books, Videos, Research Reports & More

As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.

Social Benefits of Homeownership and Stable Housing (National Association of REALTORS®, 2006 p. 16) HD 7293 N21

Low-Income Homeownership: Examining the Unexamined Goal (Brookings Institution Press, 2002)

The Economic Benefits and Costs of Homeownership (Research Institute for Housing America, May 2001)

Social Benefits and Cost of Home Ownership (Research Institute for Housing America, May 2000)

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