by Phillip B. Burum, Executive Vice President, Diversified Pacific,
President, Building Industry Association (BIA) Baldy View Chapter
As they say, it’s all been leading up to this: June concludes America’s season-long celebration of the benefits of home ownership with National Home Ownership Month. This month examines the benefits of homeownership including how those benefits extend past the financial rewards to homeowners to include the social benefits, communities and the economy.
The percentage of Americans that own their own home has been rising steadily since it first topped 50 percent in the 1950’s, peaking at 69.2 percent prior to the last recession in late 2004. While the financial and physical security that accompany homeownership are the most obvious benefits, homes offer far more than shelter.
According to a study performed by Lawrence Yun, Ph.D. and Nadia Evangelou, the purported benefits of homeownership may partly arise not directly from ownership, but from greater housing stability and social ties associated with less frequent movements among homeowners.
Investing dollars and time in a community leads to greater participation in the community. When compared to renters, homeowners are more likely to be involved in community civic activities and volunteer work. Children of homeowners, all other things being equal, do better in school and have a lower tendency towards drug use or committing crimes. A recent study from the Boston Federal Reserve even found that the income of homeowners’ children rises if home values rise, speculating that housing equity permits more human capital investment.
Communities with higher homeownership rates are more stable due primarily to the fact that homeowners stay put longer than renters.
Despite what we keep hearing about millennials and their preference for a mobile lifestyle, 86 percent of Americans still describe homeownership as a dream come true. According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate was 64.2 percent in the first quarter of 2018, which indicates that the rate of homeownership appears to be on a sustainable upward trend after reaching a cycle low in the second quarter of 2016.
Homeowners are also considered better credit and employment risks which translates to greater economic security for homeowners’ families. For instance, last year, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau reported that homeowners and their families enjoy greater “food security” than families of renters. The American Housing Survey - the most comprehensive housing survey in the United States - showed that 15.5 percent of renters were food insecure, meaning they had “low” or “very low” food security as opposed to only 4.9 percent of homeowners.
Homeownership (and new home construction) is good for the economy.
New home construction is an economic engine in and of itself. More than 80 individuals are involved in the construction of a single-family home and, on average, seven new jobs are created for each new home constructed. Job creation, however, is just one component of how new home construction positively impacts the economy.
Homeowners buy multiple homes over their lifetime and in the process contribute to economic growth and job creation. With each home sale, there are expenditures related to landscaping, home improvements, furniture and appliances, mortgage origination, and general moving expenses. Even after the home is sold and occupied, homeowner spending is a key contributor to local economies which creates and sustains job and economic growth. In San Bernardino County, if new home construction were to keep up with demand, the direct economic impact to the region would result in a surge of over two billion dollars this year alone.
The BIA Baldy View Chapter seeks to advance the opportunity to attain the American Dream of home ownership. For more information on the benefits of homeownership or how you can advocate for new home construction, visit www.biabuild.com.