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Renting vs. Owning: Homeownership Increases Long Term Wealth

homeownership

Due to economic instability, renting has become increasingly popular over the years.  Many wonder if the concept of homeownership will gradually decline with the next generation.  The New York Times reported on this issue and encouraged the continuance of home ownership, due to its influence on building wealth.

Among young people, renting has certainly outweighed home buying.  According to the New York Times, the rate of home ownership has significantly declined over the past ten years.  In 2004, the home ownership rate was at 70 percent. Now in 2014, the rate of home ownership is at an historical low of 64.3 percent.  However, the benefits of home ownership are not overrated.

Purchasing a home is one of the biggest and most important investments a person can make.  It is a pillar in the concept of achieving the American dream.  The New York Times reported that regardless of the housing bust, the net worth of home owners supersedes that of renters.  Renters lose out on investment because, unlike homeowners, they are not savings for a down payment.  With home ownership not being a main priority, this also inclines renters not to save as rigorously.

In conclusion, there is nothing that can outweigh the benefits of a home investment.  Unless renting is a personal preference or necessary due to income.

One Response

  1. Judy Naimo says:

    A brief but excellent article. Savings in whatever form among the young, for whatever reason, isn’t a strong idea. Homeownership as an investment, a means of building security is not often the first reason why people purchase a home. I’m guessing it’s part of the old American dream about owning a home, but not as a means of building wealth. Thank you for this summary.