Not only is homeownership hailed as part of the “American dream,” but it is also imbued with several positive financial and cultural effects on families. Studies have linked homeownership to everything from greater political participation to greater educational achievement among children.
However, as 4 million American homeowners lost their homes to foreclosure during the financial crisis and one-fourth of all mortgage-holders fell underwater on their loans, questions arose regarding whether the long-held benefits of homeownership still hold true today.
After reviewing research on perceptions of homeownership, Harvard University’s Joint Center for Housing Studies found the housing crisis does not appear to have had any major long-term effects on Americans’ perceptions of homeownership.
“Our review of early research on the impacts of the housing crisis on attitudes toward homeownership suggest that no extraordinary efforts will be needed to attract American households back into the housing market,” the Center said in its paper, Reexamining the Social Benefits of Homeownership After the Crisis, released Friday.
Through the lens of finance, it might be understandable—given the number of homeowners who lost their homes or fell underwater and have suffered damaged credit as a result—if some Americans abandoned the viewpoint that owning a home is a good financial investment.
However, “[e]ven after the dramatic loss of equity and the high foreclosure rates, the early evidence suggests that people seem to believe that, over the long run, owning is still preferable to renting, at least when it comes to the financial benefits of homeownership,” the Center stated.
The Center also posed the question of whether the sense of security families once felt in their homes has survived the financial crisis and found “[t]he long term cultural preference for owning seems to have weathered the recent housing crisis.”
Despite these initial findings, the Center says more research is necessary to determine both the perceived and actual non-financial benefits of homeownership after the housing crisis.
The Center says further research is warranted given that “the federal commitment and subsidy of homeownership has been justified by claims that it has a variety of social benefits to both individuals and to society.”
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”