I believe in an ownership society.  And while I will easily concede that owning a home isn’t for everyone, I would argue that home ownership SHOULD be encouraged… and is a cornerstone of America’s society.

There are a few things in particular that make home ownership valuable…

  • Personal Stability
  • Community Stability
  • Long-Term Financial Planning

There are a variety of ways that home ownership fosters Personal Responsibility.  To begin with, it is easier to put down roots in a community when you know that the lease isn’t coming up in a year or two, leading to a possible move.  Part of putting down those roots may include making friends with the neighbors, volunteering at school, getting involved with a local church or other community organization.

That leads directly into how home ownership increases Community Stability.  The very essence of community stability is personal involvement.  The community will naturally be more stable if the people that live there volunteer for local organizations and get to know each other.  Neighbors looking out for each other and helping each other are a community. And people that have decided to stay in a community for the long term worry about things like school quality, taxes and parks… quality of life issues.

A side benefit is Long-Term Financial Planning.  I won’t get into things like comparative tax benefits… those could change… but one thing that is less likely to change is the payment.  With a fixed rate loan, the payments are almost set for the duration.  There will be minor changes due to fluctuations in tax rates or insurance, but the larger portion of the payment, the principle and interest, won’t change over the duration.

 

The downside of owning a home is liquidity…  If job or life changes require a move, it may be difficult to quickly react during some phases of the market.  And there have been a LOT of people that experienced that during the recent (and possibly continuing) housing bust.

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