Home Ownership Matters

But sometimes, government policies and practices are at odds with this goal.


By Sherri Butterfield
WRITER AND EDITOR


In 2015, the Housing Opportunities and Market Experiences (HOME) survey conducted by the National Association of REALTORS® revealed that 94 percent of young renters wanted to buy. Among renters overall, 83 percent wanted to own, and 77 percent believed that home ownership was part of their American Dream.

“Home” has a very special meaning. A familiar proverb asserts, “Home is where the heart is.” And John Howard Payne intones, “There’s no place like home,” in the refrain to his poem “Home, Sweet Home.” It is the place in which one receives initial nurture, from which one goes to make one’s way in the world, and to which one returns— in person or in thought—for shelter, warmth, and comfort.

Home ownership matters.
A 2011 Pew Research Center study found that 80 percent of Americans believed buying a home was the best long-term investment they could make. And a 2013 Gallup Poll found that 81 percent of Americans either owned a home and expressed a desire to continue doing so or did not own a home but planned to buy one within ten years.

In 2015, the Housing Opportunities and Market Experiences (HOME) survey conducted by the National Association of REALTORS® revealed that 94 percent of young renters wanted to buy. Among renters overall, 83 percent wanted to own, and 77 percent believed that home ownership was part of their American Dream.

Home ownership matters to individuals and families.
An article in the New York Times asserts that home ownership is the best way for people who have not inherited wealth to build it.

CNBC’s Kathleen Elkins quotes self-made billionaire Warren Buffet as having termed the thirty-year mortgage “an incredibly attractive instrument for the home owner.” Buffet took out his one and only thirty-year mortgage in 1971, when he bought a vacation home in Laguna Beach for $150,000. He says that he probably had only $30,000 of equity in the place. Earlier this year, he listed the six-bedroom, seven-bath seaside property for $11 million.

And research has shown that home ownership not only has a significant positive impact on net worth but also results in better connected families and greater educational achievement.

Home ownership matters to neighborhoods and communities.
Home ownership offers significant social benefits in the form of more cohesive communities, improved health and safety, and greater civic participation. For example, a study by Brian J. McCabe of Georgetown University found that home owners are more likely than renters to become involved in a neighborhood group, join a civic association, and vote in local and national elections.

Home ownership matters to the economy.
The National Association of Home Builders reports that housing accounts for 15 to 18 percent of gross domestic product. And the National Association of REALTORS® says that, for every two homes sold, one job is created and that each existing home purchase generates as much as $60,000 in economic activity over time.

Home ownership is an important part of the American Dream.
As described by both historians and statesmen, the American Dream includes freedom from oppression, opportunity to work and succeed, hope that the future will be brighter than the past, and the goal of owning one’s own home.

Encouraging home ownership is sound public policy.
Because home ownership results in individual, economic, and societal benefits, state and federal policies that encourage sustainable home ownership make sense.

But sometimes government policies and practices are at odds with this goal. In Washington, D.C., where it is budget time, members of Congress are eyeing the mortgage interest deduction as money that they want to have and as money that home owners might very well do without.

And in California, members of the state Legislature have Proposition 13 in their sights. They are seeking a way to modify it so that both business owners and home owners will no longer be protected by the limits this proposition places on the initial property tax rate and on the amount by which that rate can be increased each year.

But eliminating the mortgage interest deduction and accelerating the rate at which property taxes can be regularly raised will substantially increase the long-term cost of home ownership, thereby making homes less affordable and placing the dream of home ownership further out of reach for even more Americans.