There are a lot of competing pressures on families to build a happy and healthy financial future, from cars to college and from retirement to a residence. Picking a priority can be frustrating. There is a clear "best" among all of these financial goals: homeownership.
Habitat for Humanity, The organization that works with poor families to help them get into a home, has gathered available research to understand the benefits of home ownership.
: Owning a home is good for your children. Math and reading scores for children living in owned homes versus those living in rented homes were 9 and 7 percent higher, respectively for those living in owned homes. Children of homeowners are 25 percent more likely to graduate from high school. Children of homeowners are more than twiceas likely to finish college.
: Renters' children also face greater behavioral challenges. Most dramatically, renters' teenagers are 40 percent more likely to give birth out of wedlock than children of homeowners.
Children's Future Income
: Homeowners' children earn an average of one dollar per hour more than renters' children. Homeowners' children are almost half as likely to end up on welfare as adults as renters' children.
: While reports show homeowners earn about twice as much as renters, it isn't clear that owning a home causes that - so much as, results from that. It is conceivable that the stability created by homeownership fosters career development. Homeowners' children are half as likely to grow up in single-parent households or be on welfare.
: Homeowners' children are almost 60 percent more likely to own homes themselves, providing an intergenerational benefit.
: The financial benefits of homeownership are dramatic. The mortgage serves as a sort of forced savings plan; the home equity is difficult to spend, allowing families to accumulate meaningful net worth. While saving and investing in other assets could yield similar results for renters, most do not accumulate a similar net worth.
: By owning a home that you pay off before retirement, you provide yourselves with a linchpin asset for retirement. A free place to live will allow you to stretch your other retirement assets further, making your retirement more safe and secure.
: Surveys show that homeowners are happier in their homes than renters.
: Homeowners stay in their homes an average of four times longer than renters. Perhaps, that's why homeowners are more likely to vote, to know the name of their congressman, or to be able to identify the head of the local school board.
There are a variety of programs available to help low to moderate income families acquire a home. The Federal Housing Authority offers low down payment loans. The Veterans Administration offers loans with no down payment to qualified veterans. Many states and municipalities offer assistance for acquiring a home. If you make owning a home a priority, it can become a reality.