Suze Orman, the American financial advisor, author and talk show host once said that “owning a home is a keystone of wealth… both financial affluence and emotional security.” Apparently, a significant majority of today’s home owners and renters agree and believe that owning a home is a smart long-term decision. According to a survey released by the National Association of Realtors®, 95 percent of owners and 72 percent of renters believe over several years it makes more sense to own a home.
The American Attitudes About Home Ownership survey reported a majority of home owners and a strong percentage of renters “agree” or “strongly agree” that owning a home provides a healthy and stable environment for raising a family and that it helps them meet long-term financial goals. In addition, 93 percent of owners surveyed would purchase a home again.
Home ownership benefits individuals and families, strengthens communities and is vital to our nation’s economy. Home is where we make memories, build our futures and feel comfortable and secure. It is only natural people feel so strongly about home ownership.
However, owners and renters do not agree on everything. More than half of owners reported feeling very or extremely satisfied with the overall quality of their family life. Only one-third of renters reported the same level of satisfaction. According to the Arkansas Realtors® Association home owners also report higher levels of self-esteem and happiness when compared to renters.
Some of that may have to do with the “hidden” costs of renting. According to a recent Trulia.com article, renters can expect the following hidden costs:
- Opportunity costs. When you rent, you lose out on the chance of building equity for the future.
- Income taxes. If you earn above a certain level of income, the income taxes you are paying as a renter will be substantially higher than they would be if you owned a home and could deduct your property taxes and mortgage interest.
- Storage. Many a renter simply has too many personal belongings to stuff into their small apartment, so it is not uncommon for tenants to also pay for a storage space.
- Costs of improving the property. Long-term renters may paint, replace the flooring, and do other improvements to make the place livable. But since it is not technically “their” home, when they do move out, all the cash they invested is lost. In fact, some landlords may require them to pay or forfeit deposit money to bring the place back to its original, neutral décor.
- Lost deposits. Anyone who has rented more than a couple of apartments is well aware of the chances of losing some or all of your security deposits, no matter how well you care for your home.
According to the survey, sixty-three percent of renters reported they are at least somewhat likely to buy a home at some point in the future. Out of that group, young adults (18-29 years old) have the strongest aspirations to own a home.
Arkansas Realtors® say that in today’s market, many aspiring home owners are faced with worries about job security and creditworthiness. Three out of five renters surveyed who said they are very or extremely likely to buy considered job security and credit worthiness to be obstacles. Also, 80 percent of renters noted that having enough money for a down payment and closing costs were also obstacles.
Support of the mortgage interest deduction was shared by an overwhelming majority of both owners and renters. Seventy-four percent of owners and 62 percent of renters say it’s very or extremely important that the MID stay in place.
It is the belief of the ARA that this survey demonstrates the strong public support of the MID, and that we need to keep policies in place that encourage responsible, sustainable home ownership. The ability to deduct the interest paid on a mortgage can mean significant savings at tax time and facilitates home ownership by reducing the carrying costs of owning a home.
This survey was conducted online within the U.S. and fielded October 6-20, 2010. A total of 3,793 adults, 18 and older were surveyed, including 1,880 home owners, 1,115 renters, and 798 young adults. All samples came from the Harris Poll online database and were weighted for age, sex, race/ethnicity, education, region and household income to be representative of the U.S. general population of adults 18 and older. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
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House to House is written by Amy Glover Bryant and distributed weekly by the Arkansas Realtors® Association.
