Homeownership Matters
... to People , to Communities , and to the Economy
By Jordan Levine , C . A . R .
The United States has supported homeownership for more than 100 years with direct tax relief and other incentives aimed at getting more folks to buy homes . As a nation , we have agreed that we want people to own their own home : it ’ s good for families , it ’ s good for the economy , and it is good for society . In some ways , the idea of owning your own home has become synonymous with the “ American Dream ” itself . The CALIFORNIA ASSOCIATION OF REALTORS ® has conducted annual survey research for more than three decades , and that research continues to show that the vast majority of renters still aspire to that American Dream , of which homeownership is front and center . Overall , half of all Millennials and Gen-Xers who rent in California say that homeownership is “ very ” or “ extremely ” important to them , while a small minority report that it is “ not at all ” important .
Top Producing Team Gilroy Office , 2015 , 2016 , 2017
Sean Dinsmore , Realtor Intero Real Estate Services www . TheDinsmoreTeam . com 408.710.2855 DRE # 01966405
Marta Dinsmore , Realtor GRI Intero Real Estate Services www . TheDinsmoreTeam . com 408.710.0571 DRE # 01352339
Why Homeownership Matters
Not only is it aspirational , it has been shown consistently in the academic literature to be one of the only meaningful and reliable ways for families to build and maintain wealth and to propel future generations forward . According to the Federal Reserve ’ s 2016 Survey of Consumer Finances , the median net worth of renters was just $ 5,200 while the median homeowner had more than $ 231,000 in net worth .
And it is no surprise that homeowners have nearly 45x more wealth than the typical renter — although one can construct a theoretical model where a typical income earner can do just as well financially by investing their income into the stock market and other financial investment products , these remain theoretical models . The reality is that this rarely happens and instead of taking any savings and making savvy financial investments , renters end up consuming more : nicer cars , finer clothing , more spending on entertainment . Indeed , Harvard ’ s Joint Center for Housing Studies notes in a recent study on the benefits of homeownership that “ while studies simulating the financial returns to owning and renting find that renting is often more likely to be beneficial , in practice renters rarely accumulate any wealth .”
However , it isn ’ t all just dollars and cents — it ’ s also about economic mobility . There is wide consensus that America ’ s economic path forward relies on having a skilled and fungible workforce . Educational attainment is a huge part of that competitiveness , and while we know that a parent ’ s income level is a strong determinant , many studies have shown that when a parent is a homeowner there is an additional increase in the likelihood that a child will both finish high school and achieve better Math and English scores above and beyond the effects of how wealthy the family is , and that these results are particularly true at the lower end of the income distribution . Thus , preserving and expanding homeownership in California is not only good for those families who can attain it , it is of paramount importance to the economy and to future generations .
What is at Stake for California
Because homeownership is so important to the future , C . A . R . fought until the end of the long-overdue debate over how to keep homeownership front and center in the new tax reform package . There is no doubt that the economy would
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GILROY • MORGAN HILL • SAN MARTIN JUNE / JULY 2018 gmhtoday . com