Homeownership, Fulfilling the Promise of the American Dream

Image from Celeb Youth

Image from Celeb Youth


by Phillip B. Burum, Executive Vice President, Diversified Pacific,

President, Building Industry Association (BIA) Baldy View Chapter

     The Baldy View Chapter of the Building Industry Association (BIA) is the local chapter of a nationwide organization (the National Association of Home Builders) whose core mission is to promote and advocate for home building and homeownership. Our local chapter represents builders and the hundreds of other business that work hand in hand with homebuilders throughout San Bernardino and eastern Los Angeles counties. I am proud to be of service to this organization because my core belief, as the new president of the BIA, a home owner, and a home builder; is that home ownership is the catalyst for prosperous and safe communities. 

     One of my most important duties as president is to produce this weekly column to inform homeowners and provide prospective homebuyers with information in support of this major life decision. Every week I will attempt to present readers with facts, figures, data and even a few opinions that may relate to the home you live in today or the one you may be considering purchasing tomorrow. For my inaugural article, because buying a home is one of the biggest financial decisions most of us make in our lifetime, I wanted to discuss just some of the reasons that I believe buying and owning a home is almost always the best choice.

- Stability - If you are an upwardly mobile millennial you won’t have to think about this for a few years, but for the rest of us, stability has tremendous appeal. Stability enables and encourages forming bonds and friendships and fosters a greater sense of being part of, and getting involved in, one’s community. Familiarity and connectivity produce safer, more desirable neighborhoods. In addition, and key for those of us that have children, studies have shown time and time again that children of homeowners perform better in school, have a greater aptitude for social integration and are generally more successful in their adult life.

- Financial predictability - Mortgage rates today are still hovering at historically low levels. No one knows for sure what interest rates will do over the coming years but, even as rates rise, having a mortgage with a defined payment schedule provides flexibility in all other financial planning. Renting a home places your monthly living expense budget in someone else’s hands, leaving less certainty and decision-making ability for us as we make other long term financial plans, like vacations, new cars, college, or retirement. 

- Investment returns - Many prospective homeowners miss the basic math of remarkable return potential in the form of real estate investment.  A typical homebuyer will buy a home with a down payment, or equity of approximately 20 percent of the cost of the home. In the sixty years that data has been accurately collected, home values in California have appreciated an average of more than four percent annually. There have been spikes that resulted in much higher appreciation and there have been periods when homes deprecated, yet from 1971 through 2017, the average home value has appreciated by over four percent per year. That appreciation is on the entire value of your home, not just the equity you have invested. What that means to the homeowner is that their equity investment can be expected to produce a 20 percent annual rate of return over the life of ownership. In comparison, talk to a financial planner and ask him or her to show you their last 20 years of performance. If they can show you anything better than a 10 percent annual return, they are better than most.

- Flexibility - When you own your home, you don’t need permission to paint and decorate to fit your taste or make improvements to the home or landscaping. Homeownership offers the unique benefit of allowing owners to express themselves in ways that are not available to renters. This is the part that is not quantifiable economically and could be considered priceless by some but it boils down to having the ability to make a house into your home.

     All of the above is to say: for anyone who intends to settle in an area for more than a few years, home ownership is the best option.

     As BIA president, I am fortunate to lead the association that helps further the ideal of the American Dream. I feel honored and humbled by this task but it is a role that I have taken on because it is important. I am blessed to be a homebuilder. We don’t build widgets or fidget spinners or other things to pass the time - we build homes. I suspect there are few moments more gratifying in life than the day you buy your first new home, or move into your dream home: the excitement, coupled with the feeling of accomplishment and the knowledge that it’s yours. As a homebuilder, I get to witness people experiencing that feeling all the time. If you have not yet experienced that feeling for yourself, I hope you will have the opportunity very soon.     

     Have a terrific Martin Luther King Day.