After the crash of the housing market homeownership kind of got a bad rap which makes sense because there were so many people who had negative equity. As people continue to make mortgage payments and home values go up instead of down a lot more people have home equity.
Home ownership is down nationwide from what it was at the peak in 2005 but looks to be as strong as it was in the 1990’s. In the long run owning a home is still a great way to accumulate wealth. People who have their home paid off when they retire spend less on housing and have more money for food and health care. I guess some even have money for fun and travel. 🙂
Here is a looks at networth and home ownership from a presentation given by Lawrence Yun, Ph.D., NAR Chief Economist Ph.D., NAR Chief Economist, to the Residential Real Estate Forum at the 2014 REALTORS® Conference & Expo in New Orleans, LA on November 7, 2014.
That isn’t to say that now is a good time to buy a home. The good job needs to come first and those don’t seem to be all that easy to find but are at least more plentiful than they were a few years back. Over the long haul renting is usually better for the landlord economically than it is for the renter.
Good article. I’ve heard a lot on the media lately about renting being better and I don’t believe it. The problems we’ve had in the last few years were not a problem with home ownership but a problem of mortgage companies talking people into buying houses they couldn’t afford, people wanting houses they couldn’t afford and then getting home equity loans against their homes to buy other stuff. If you rent the rent payment is only going to go up and will end up being greater than a mortgage payment if it isn’t to start off with. Once you get your house paid off you’re in a good place.
Barry – we paid off our home. It is a wonderful feeling. If we were renting we would still be paying. With that said I still discourage people from buying if they are not sure they will stay in the area for a decade or so.
I did too a few years back. My son has the other problem. He bought a house and now spends most of his time out of town. It is in a good location though so that is good.