How Homeownership Impacts You

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How Homeownership Impacts You.

June is National Homeownership Month, and it’s the perfect time to reflect on how impactful owning a home can truly be. When you purchase a house, it becomes more than just a space you occupy. It’s your stake in the community, an investment, and a place you can put your stamp on.

If you’re thinking about buying a home this year, here are some of the benefits you’ll experience when you do.

The Emotional Benefits of Homeownership

Because it’s a place that’s uniquely yours, owning a home can give you a sense of pride and happiness in several ways.

Your Home Can Reflect Your Tastes and Personality

Investopedia puts it like this:

“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world.”

That knowledge can lead to a powerful, emotional connection to the place where you live. But so can the realization that your home will grow with you. Because it’s yours, you have the freedom to make updates to it as your needs and tastes change. As Logan Mohtashami, Lead Analyst for HousingWire, says:

“The psychology is that this is yours and you’re going to make it as good as possible because you’re in for a long time, . . . “

And that can create a greater sense of ownership, pride, and connection with your home and your community.

It Can Enhance Your Neighborhood and Civic Engagement

Homeownership can lead you to get even more involved with your local area. After all, you’re putting your roots down in a location and will want to do what you can to help improve it, much like your home. In a recent report, the National Association of Realtors (NAR) says:

“Living in one place for a longer amount of time creates and [sic] obvious sense of community pride, which may lead to more investment in said community.”

The Financial Benefits of Homeownership

When you choose to become a homeowner, you’re making a financial decision as well. That’s because your home is also an investment.

It Can Help You Feel Financially Stable

Homeownership is truly one of the best ways to improve your long-term financial position. Not only will you have a predictable monthly housing expense that can benefit your budget in the short term, but you’ll also gain equity as your home appreciates in value and you make your monthly mortgage payment. As Freddie Mac says:

“Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

It Can Grow Your Wealth

Because of your growing equity, you can build your net worth as a homeowner. And when you compare the difference in net worth between a renter and a homeowner, it’s clear that owning a home truly offers a great way to build your long-term financial position.

According to the latest data from NAR, the median household net worth of a homeowner is roughly $300,000, while the median net worth of renters is only about $8,000. That means a homeowner’s net worth is nearly 40 times that of a renter.

Bottom Line

Homeownership is truly a way to find greater satisfaction and happiness and to build financial freedom. If National Homeownership Month has you dreaming about purchasing a home, then let’s connect to begin the process today.

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How Homeownership Can Bring You Joy

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How Homeownership Can Bring You Joy.

If you’re trying to decide whether to rent or buy a home, you’re probably weighing a few different factors. The financial benefits of homeownership might be one of the reasons you want to make a purchase if you’re a renter, but the decision can also be motivated by having a place that’s uniquely your own.

If you want to express yourself by upgrading and customizing your living space but are feeling held back by your rental agreement, it might be time to consider the perks of owning your home.

A Little Change Can Bring Lots of Joy

There’s a significant level of pride that comes from owning a home. That’s because it’s a space that truly belongs to you.

A recent report from the National Association of Realtors (NAR) shows making updates or remodeling your home can help you feel more at ease and comfortable in your living space. NAR measures this with a Joy Score that indicates how much happiness specific home upgrades bring. According to NAR:

“There were numerous interior projects that received a perfect Joy Score of 10: paint entire interior of home, paint one room of home, add a new home office, hardwood flooring refinish, new wood flooring, closet renovation, insulation upgrade, and attic conversion to living area.”

The report also breaks down just how much each of these projects can enhance your emotional attachment to your home, even leading you to want to spend even more time in the space (see graph below):

How Homeownership Can Bring You Joy | Simplifying The Market

And while many of the items NAR highlights are larger tasks, some, like painting rooms, are much smaller. Even those quicker projects can still bring you a greater sense of joy and accomplishment. Not to mention when you make upgrades in your home, you could be increasing its value which also gives your net worth a boost if you invest your time and effort wisely.

You’re Free To Update Your Home to Your Heart’s Content

These types of updates can result in additional happiness when you complete them, but there’s another reason you can feel good as a homeowner. In most situations, you’re free to renovate or update the interior of your home without needing additional permission. But as Business Insider points out, renters may not have the same freedom:

“Your landlord won’t always approve changes when you rent. But you have the power to update the home when you’re the owner. (Just make sure any big changes are approved by your homeowner’s association, if necessary.)”

If you do make changes as a renter, there’s a good chance you’ll need to revert them back at the end of your lease based on your rental agreement. That can add additional costs when you move out. That’s one major benefit of owning your own home. Unless there are specific homeowner’s association requirements, you typically won’t have to worry about the changes you can and can’t make.

Bottom Line

Deciding whether to rent or buy is a personal decision. The financial benefits are critical, but don’t overlook the emotional impact homeownership can have. Let’s connect to discuss all the benefits you can enjoy when you purchase your own home.

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A Key To Building Wealth Is Homeownership

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A Key To Building Wealth Is Homeownership.

The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says:

“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”

Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal.

Owning a Home Is a Building Block for Financial Success

A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds:

“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”

To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter (see visual below):

A Key To Building Wealth Is Homeownership | Simplifying The Market

The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth.

Equity Gains Can Substantially Boost a Homeowner’s Net Worth

The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month.

In other words, when you own your home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.

To sum it up, NAR says it simply:

“Homeownership has always been an important way to build wealth.”

Bottom Line

The gap between a homeowner’s net worth and a renter’s shows how truly foundational homeownership is to wealth-building. If you’re ready to start on your journey to homeownership, let’s connect today.

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