It’s a given. Yes, even after the last few tumultuous years, that buying a home is a good investment. Rather that paying rent month after month, assuming a mortgage comes with the ultimate promise of home ownership. Being a responsible borrower also helps establish a more solid financial foundation in the form of good credit and home equity. While such benefits may be well publicized, owning a home also brings social benefits. And no, not because of your posts of before and after home projects on Facebook and Pinterest.
In their ongoing mission to understand what drives the American home buyer, the National Association of Realtors (NAR) conducts periodic studies and also reviews numerous surveys by other groups and organizations. A recent effort examined the social benefits of home ownership. Among renters and homeowners, the aspects of education, civic engagement, and overall well-being were considered. The NAR analysts discovered that committing to buying and owning a home significantly impacts one’s socioeconomic status. Here’s a look at the three main points this study brought to light:
Homeownership and educational status
The children of parents who are engaged in the process of home ownership tend to do better in school. In fact, among those with school age children, homeowners see higher math and reading scores, fewer behavioral issues, a lower drop-out rate and a much lower incidence of teen pregnancy as opposed to parents who are renters.
In the Journal of Urban Economics, researcher D. Aaronson explained that, “parental homeownership in low-income neighborhoods has a positive impact on high school educational outcomes particularly for minorities and low income families.” Aaronson also confirmed that parental homeownership in low-income neighborhoods has a favorable effect on the rate of high school graduation.
Homeownership and civic engagement
Socioeconomic analysts, Richard Green and Michelle White, note that certain practices required of homeowners result in an increase in their community involvement. For example, because they have committed to what is likely the largest purchase they will ever make, they have a vested interest in the neighborhood. As a result, they encourage respectful behavior and community involvement and tend to build long-term relationships with neighbors.
Whether they have children or not, homeowners engage in more types of civic participation compared to renters. They usually vote, do volunteer work and connect through other activities that get them out and about in their communities.
Homeownership and overall well-being
Individuals identified as homeowners revealed to survey takers that they feel better about their lives in general. They also indicated that their quality of life is higher due to their efforts to purchase a home of their own. Another point that set homeowners apart from renters was
their evolving skill set. The homeowners tend to develop more life skills such as financial management, fiscal responsibility and home maintenance. Within families, it is likely that such abilities will be passed on to the children, which spreads the feeling of well-being further.
Several other studies showed that new homeowners from lower income groups noted improvements in the areas of life satisfaction and self-esteem. Those findings revealed that the homeownership process gave them more control of their lives. Among survey participants, homeowners also gave themselves higher ratings for physical and psychological health than renters. One very interesting point to come about was that, “renters who become homeowners not only experienced a significant increase in housing satisfaction, but also obtained a higher satisfaction even in the same home in which they resided as renters.”
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