When people talk about homeownership and the American Dream, much of the conversation revolves around the financial benefits of owning a home. However, two recent studies show that the non-financial benefits of homeownership might be even more valuable.
In a recent survey, Bank of America asked homeowners: “Does owning a home make you happier than renting?” 93% of the respondents answered yes, while only 7% said no. The survey also revealed:
- More than 80% said they wouldn’t go back to renting
- 88% agreed that buying a home is the “best decision they have ever made”
- 79% believed owning a home has changed them for the better
Those surveyed talked about the “emotional equity” that is built through homeownership. The study says more than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment. Besides building wealth, the survey also showed that homeownership enhances quality of life:
- 67% of current homeowners believed their relationships with family and loved ones have changed for the better since they bought a home
- 78% are satisfied with the quality of their social life
- 82% of homeowners said they were satisfied with the amount of time they spend on their hobbies and passions since purchasing a home
- 75% of homeowners pursued new hobbies after buying a home
Homeowners seem to be very happy.
Renters Tell a Different Story…
According to the latest Zillow Housing Aspirations Report, 45% of renters regret renting rather than buying — more than five times the share of homeowners (8%) who regret buying instead of renting. Here are the four major reasons people regret renting, according to the report:
- 52% regret not being able to build equity
- 52% regret not being able to customize or improve their rentals
- 50% regret that the rent is so high
- 49% regret that they lack private outdoor space
These two studies prove that renting is just not the same as owning.
Save for Down Payment
It is understandable, one of the hurdles to becoming a homeowner is saving for the down payment. Below are a few tips on ways to save your down payment and start the journey to home ownership.
Find out where your money goes. For a month or two, track each expenditure, no matter how small. Get an objective picture of where you’re spending the cash.
Get specific about how much you need to save. Even if you’re not 100% sure what your down payment needs to be yet, it’s good to start doing a little math to figure out how much you need to save. Pick a dollar amount and a timeline to hit that dollar amount.
Determine the big moves you can make. If you’re in a three-bedroom apartment and can stomach the idea of scaling down to a one bedroom, how much would you save in rent? What about going from two cars down to one? If you can make it work, these sacrifices will have a huge impact on your savings goals.
Setup a separate savings account. Don’t let your dream home money mingle with your regular checking or savings account. Establish a high-yield savings account with a credit union or money market account to protect and build your stash.
Pretend you already have a house payment. Once you determine the approximate amount of what a new house payment would be, start making that payment now. Instead of paying the bank, pay your savings account. This trick is two-fold. It will help you accumulate a down-payment faster, and it will ensure that you are able to afford the amount of the new house payment.
There are both financial and non-financial benefits to homeownership. As good as the “financial equity” is, it doesn’t compare to the “emotional equity” gained through owning your own home. I would be happy to talk with you about the process to becoming a home owner. Contact me today: (928) 916-1921.