Is there value in owning a home? The recently released 2010 National Association of REALTORS® Profile of Home Buyers and Sellers brings us some promising results. Today homeowners are living in their homes longer, and after several years of price declines, are seeing rises in home equity gains.
It was only earlier this decade that so many buyers jumped on the investment bandwagon. They bought and sold within incredibly short time frames, and walked away with profits. But as the booms busted, many sellers found they had bought at the top of the market and as prices corrected, they lost more than just dollars. Foreclosure rates skyrocketed. Historically, however, homeownership is a long term investment, and one that brings many rewards.
“Sellers who purchased at the top of the market and had to sell in a short time frame were hurt by the price correction, but the vast majority who are able to stay for a normal period of home ownership generally built enough equity to make a trade-up purchase,” NAR 2010 President Vicki Cox Golder said. “Despite swings in the housing market in recent years, the fact is most long-term owners see healthy gains in the value of their property.”
Interesting take on benefits of homeownership other than the most obvious.
NAR Research recently released a report on The Social Benefits of Homeownership and Stable Housing. We present highlights from that report below.
The economic benefits of the housing market and homeownership are immense and well documented. The housing sector directly accounted for approximately 14 percent of total economic activity in 2009. Less than half of Americans owned their homes at the beginning of the 20th century. Homeownership remained fairly stable until the onset of the Great Depression. In the subsequent two decades, the homeownership rate rose dramatically, easily topping 60 percent by 1960. Modest gains were made during the 1960s, 1970s and 1980s. However, during the early 1990s, the homeownership rate once again trended upward as mortgage rates steadily declined and the economy expanded at rates not experienced in many years. By 2004, 69 percent of Americans owned their homes – a record high. The homeownership rate has since declined to 66.9 percent as of the second quarter 2010. Still, that figure indicates that two thirds of U.S. households own their own home. (For more information, visit www.census.gov.)
For more information
The complete report, The Social Benefits of Homeownership and Stable Housing, is available at www.realtor.org. The report contains a complete listing of research studies and sources for the data and conclusions presented.