The health and happiness benefits of homeownership

There’s a lot of talk about the financial benefits of homeownership, such as creating equity and wealth, but what isn’t always as obvious are the social benefits: making people happier, healthier and more civically engaged.


Owning a home has non-financial benefits

A large body of research from Canada and around the world finds homeownership contributes to higher levels of happiness and life satisfaction for homeowners and their families. And that results in a wide range of educational, health and socio-cultural benefits, which were laid out in the Canadian Real Estate Association (CREA)‘s recent white paper, The Homeownership Dividend for Canadians.

These non-financial benefits have spillover benefits to the broader community and surrounding civic fabric — all of which are positively linked to a culture of homeownership. These “positive externalities,” extend beyond the homeowner to the rest of society, regardless of demographics, ethnicities, income levels and ages.

There are a number of reasons for this higher level of life satisfaction, from having a sense of financial security and ‘rootedness’ to having greater control over one’s life.


Homeownership builds pride and stability

It’s also the Canadian dream for many. “We can’t forget that element — people don’t come to this country to rent, they come to be a homeowner,” says Lisa Patel, President of the Toronto Regional Real Estate Board and a member of the CREA’s Federal Affairs Committee.

“There’s a certain amount of pride that comes with homeownership. REALTORS® don’t just sell you a house, they sell you a home,” she says. And while homeownership comes with financial benefits, such as building equity and wealth, it also helps to build more vibrant communities, because “those who have a place to call home tend to want to better their neighbourhood.”

While pride might not show up on the balance sheet, it does affect behaviour and choices. Several studies cited in the white paper show that homeowners have improved satisfaction with their living conditions and higher rates of overall life satisfaction, regardless of income levels and socioeconomic backgrounds.

For example, CMHC’s 2013 Canada-wide survey of 326 Habitat for Humanity households found that habitat homeowners reported better well-being for their children, a greater sense of stability and a greater feeling of control. Of these respondents, 70% had previously lived in some form of rental housing.

Other countries have had similar results. A group of Dutch housing policy researchers, for example, studied 2000-2001 data from eight European countries and found higher levels of satisfaction with one’s living conditions among homeowners than non-homeowners in seven out of eight countries. Another European study drawing on data from 15 European countries found homeownership correlated with increased overall life satisfaction, regardless of household circumstances.


Better health and education outcomes

Aside from overall life satisfaction, building equity can help with other life goals, such as paying for higher education. The stability and security of homeownership has been shown to contribute to a better home and learning environment, resulting in better educational outcomes.

Several studies referenced in the white paper found when a family owns their home, school drop-out rates decrease, and the homeowner’s children are more likely to graduate with a bachelor’s degree or higher.

The research also reflects the influence of homeownership on physical and mental health. “Financial security and residential stability can serve as a buffer against market fluctuations that contribute to physical and mental stress, especially among low-income families,” CREA noted in the white paper.

“When you have the security of homeownership, you are the one in the decision-making seat, you decide when you’re going to move or relocate, so it eliminates the anxiety of someone telling you when you’re going to move,” says Jill Oudil, CREA’s Chair-Elect.

When you rent, your landlord may require you to move whether you like it or not. If you own, the decision to move is your own. If you want to renovate, paint or make a space feel completely your own, you can. If you want to own a pet, you can.

“It makes you content and healthy and happier in your own environment because you have that choice,” says Oudil. “It’s entirely different in how it promotes a feeling of success and achievement — it’s your home.”


Benefits include greater civic engagement

Although these mental health benefits directly affect homeowners and their families, they have positive spillover effects in neighbourhoods and communities. “You invest in the neighbourhood when you live there,” says Oudil. “You own a portion of that neighbourhood so you care about the whole neighbourhood.”

That community orientation of homeownership is often reflected in higher rates of civic engagement, and in turn results in more connected communities. For example, a 1996 literature review by researchers from the University of North Carolina found higher rates of homeownership were linked to greater neighbourhood stability (measured as property condition and length of tenure).

This ‘rootedness’ is a potential contributor to positive civic outcomes because, as noted in the white paper, “by virtue of their longer tenure and more stable financial situation, homeowners may be more inclined to invest into and participate in their neighbourhoods.”

“There’s stability with owning a home,” says Cliff Stevenson, CREA’s Chair. “I would argue that homeowners take more of an interest in the neighbourhood around them, running in community associations or volunteering. It’s a lot easier for homeowners to do that, given the longevity of the investment. The overarching terminology is about stability.”

Homeowners tend to be more active in their communities; they’re more likely to vote and more likely to volunteer for local organizations. They also tend to spend more time and money maintaining their homes, which contributes to beautifying their neighbourhood, which in turn contributes to community pride.

A 2009 Canadian Centre for Policy Alternatives study on low-income households found that participants who purchased homes remained in inner urban areas, “suggesting homeownership can help reduce urban flight and strengthen neighbourhood connections,” according to the white paper.

“If a family owns a home, the children grow up with that example,” says Oudil. That might explain why, when children grow up and eventually move away, they often move back later to raise their own children.

“It’s so emotionally fulfilling,” she says. “You can say there’s the finance side and the health side and community side, but the fact is all of those are connected, which breeds more happiness.”


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