Talking about throwing the baby out with the bath water! It is a huge leap of logic to deduce that because house prices have been going up too much for some economists’ liking that homeownership should now be questioned. Canadians are blessed with some of the best housing in the world with roughly 70 per cent of them investing in homeownership. Does that not say something about what they covet and desire?
Yet as we have heard in the United States, following their 2007 sub-prime mortgage-induced housing market collapse, owning a home can all of a sudden be a bad thing or at least a worrisome risk that you may want to avoid.
Now, we have one of our own national magazines getting on the homeownership-is-bad-for-you bandwagon, which smacks of disingenuous writing of greatly exaggerated proportions. You will always find hard luck cases about how homeownership did not work out for some people because they were overextended financially, lost a job, experienced a bitter break-up, had unexpected issues with the home, etc.
But that is hardly a reason to extend their misfortune to the majority of Canadians, who would gladly line up and give their own story about why homeownership has been integral to fulfilling one of their most important life goals and has given them many happy memories.
Without getting into all aspects of why people own a home, here are a few facts from the Field Guide to the Benefits of Home Ownership provided by the U.S.-based National Association of REALTORS®.
Homeownership:
• Homeowners are 28 per cent more likely to repair or improve their residence than renters.
• Each home purchase generates as much as $60,000 of economic activity in the local and surrounding area.
• Children of homeowners are 20 per cent less likely to become teenage mothers.
• Homeowners are 28 per cent more likely to vote.
• The college graduation rate for children of homeowners is 116 per cent higher.
Another comment from this guide will resonate with many homeowners: “Homeowners have a financial stake in the value of their home. Therefore, owners have more incentive to deter crime by forming and implementing voluntary crime prevention programs. Homeownership also contributes to stable communities, and stable neighbourhoods contribute to reduced crime rates.”
Certainly WinnipegREALTORS® direct experience with the establishment of the Housing Opportunity Partnership (HOP) in 1997, which is designed to revitalize Winnipeg’s West End through reclaiming rental homes in a state of disrepair and giving a hand-up to new homeowners, has been an important contributor to neighbourhood renewal. There is no question that HOP has been a stabilizing influence on the streets and blocks targeted by bringing more homeownership to the area.
Here is more evidence on the benefits of homeownership based on polling by the National Association of REALTORS® in the U.S. where the percentage of homeownership versus rental is less than in Canada.
• Eighty-eight per cent of homeowners report that owning a home has been a positive experience. Most homeowners (95 per cent) and renters (72 per cent) believe that over a period of several years it makes more sense to own a home than to rent.
• Seventy-seven per cent of homeowners say owning a home helps them achieve long-term financial goals, while another 70 per cent say it helps them achieve the American dream.
Housing is a key economic driver in the U.S. economy, with one job is created for every two homes sold.
More than eight in 10 homeowners would prefer to buy a home if they had to move in the next six months.
Whatever article you may read on the benefits or disadvantages of owning a home, you owe it to yourself to first determine if you are in a financial position to qualify to purchase a home and then have a discussion with a REALTOR®. Based on the health of Winnipeg’s local real estate market — with housing affordability far better than some other major markets and a better supply of inventory than has been the case in many years — ownership has to be part of your decision-making consideration before you decide to rent.