Owning Your Home: The American Dream
When people think about the factors involved in the American Dream one that always makes the list is owning your home. It is a strong sign of financial stability and success. No matter how modest your beginnings, freely working to make this happen has long been a hallmark of the American Dream.
However, lately there have been media rumblings that perhaps owning your home is not the gold standard for American success that it once was. The argument is that the financial advantages to owning your home are no longer sound.
Does Renting Make More Sense?
Yes, it is true that there are situations where owning your home makes less financial sense than renting. Most of these reasons hinge on the anticipated length of residence. According to The New York Times, “Buying tends to be better the longer you stay” mainly since the upfront expenses are distributed over time. Included in one of its Upshot commentaries, the Times introduces a calculator that adds up “Initial,” “Recurring,” and “Opportunity Costs.” These figures show different buy and rent instances as a tool to show at what monthly rental cost “renting is better.”
The Times calculator precisely illustrates the monetary benefits renting can often have. However, it overlooks one very significant component of owning your home. It is the feature that is inherent whenever a family chooses to move from renting to buying. It starts with the first savings started for the down payment on a home. This benefit continues till the mortgage is paid off.
There are certain emotional advantages of owning your home. Also, a clear benefit is the financial independence home ownership usually brings. Take into consideration the Federal Reserves last report “Changes in U.S. Family Finances” during the span of time from 2010 to 2013. It concluded that median incomes fell 5%, while “the median net worth of homeowners increased 4%, whereas that of renters or other homeowners did not change.”
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