One of the biggest financial debates everyone has. Let’s be honest, the renting process is easy and less complicated. Renting makes it easier to relocate with less restrictions and you are not reliable for repairs. Sounds like an amazing deal if you are not ready to settle, invest, or financial capable. Buying a home can be scary. Essentially, you are making a huge financial decision and planting roots in your life; but is that a bad thing?
Homeownership builds wealth, provides long-term stability and over time it is more affordable than rental housing, especially for low and moderate -income Americans and households of color. In this blog we are going to convince you that homeownership is the way to go. It is the greatest source of wealth accumulation for Americans. Nearly one third of Americans wealth is in home equity. This is a benefit anyone can attain, no matter your race, age, or gender.
Whether you’re single and just starting out, looking to start a family or already have a family of your own, homeownership is a credible way that you can pass down wealth to future generations. Generational wealth are financial assets that are passed on and built upon with each generation within a family. It is particularly important for future financial security. Homeownership will allow you to increase your long-term wealth drastically more than those who choose to rent. Rent payments are similar to daily transactions, however by paying a mortgage you are repaying a debt that eventually benefits you and your family – investing into your future.
Increase in Home Equity
Your home equity is the difference between what you can sell your home for and what you owe and it grows as you pay down your mortgage. Over time more of what you pay each month goes to the balance on the loan rather than the interest, building more equity. On the other hand, as you pay rent you are monthly contributing to a landlord than a physical asset, therefore not building equity.
By building equity in your home, you are also setting aside money for your future. As your property increases in value, so does your equity, giving you the opportunity to sell for a profit. Majority of a homeowner’s wealth is made from a home’s equity.
Studies show that homeowners have higher self-rated health when compared to non-homeowners. It was reported that low-income individuals who recently became homeowners reported higher life satisfaction, higher self-esteem, and higher perceived control over their lives.
Additionally, being behind on rent, moving multiple times, and experiencing homelessness are associated with adverse health outcomes for caregivers and children and with material hardship.
A place of belonging
Home is a central place to entertain and gather with loved ones. Having somewhere that you and your family can make memories, celebrate holidays, and spend time with friends is an important milestone in many people’s lives. Owning a home helps foster emotional well-being and provides control. Also, a sense of accomplishment. Additionally, homeowners find a great sense of belonging in a community where they get to know their neighbors and engage in neighborhood events.
Homeownership is the foundation for opportunities and access to better education, health, and jobs. As we are all aware, there is a large wealth gap between black and white Americans, and homeownership is one way to decrease this gap. When you invest in your future through homeownership, the possibilities are endless.
As an organization we understand there are several policies and barriers that prevents individuals and families from becoming a homeowners. However, do not let systematic discrimination stop you. If you’re seeking to become a homeowner, or if you’re trying to save the home you already have from foreclosure, call us today, and get HUD – approved homeownership counseling and education.
The mission of Mid City Redevelopment Alliance is to develop and promote the growth and renewal of Mid City Baton Rouge by attracting new and retaining current residents and businesses.