A study conducted by the National Association of REALTORS® has demonstrated that the United States will not become a nation of renters due to the many benefits both financial and otherwise of owning a home.
An analysis over a 31-year period across 23 metropolitan areas compared the ownership benefits in terms of appreciation and interest deductibility and the costs homeowners incur with down payment, taxes, insurance and maintenance. When it was assumed that renters reinvested any savings in rent (versus a higher monthly mortgage payment), maintenance and down payment, renters had a greater portfolio than buyers in 91 percent of the areas examined. However, when the model allowed renters to spend any savings rather than reinvest those savings, 84 percent of buyers came out ahead.
A study recently released from the Federal Reserve Board points out that a homeowner’s net worth is 45.9 times that of a renter’s net worth. These findings suggest that homeownership can potentially be seen as a savings plan. From a financial perspective, people who are committed to staying in a property for a long period of time will benefit from being a homeowner and would more than likely accumulate more wealth than that of a renter.
Owning a home is also at a 30-year record affordability level. A recent study conducted showed that 23 states out of 50 are at an all time high for levels of affordability based on price-to-income ratios and also mortgage payment-to-income ratios. It is more affordable to own a home today than at any other time in the last 30 years.
There are more than 75 million homeowners in the United States and that number continues to grow. REALTORS® continue to work to help with public policies that promote responsible, sustainable homeownership. To find out more about how you can become a homeowner, contact your REALTOR® today.