Dollars & Sense: Homeownership Not All It's Cracked Up to Be?

[marmar]

Homeownership Not All It's Cracked Up to Be?
by Dollars and Sense



An economist at the Wharton School just released a study looking at the ancillary individual and community benefits that supposedly come with homeownership: greater happiness, more civic participation, etc. etc. Her research basically finds no support for these benefits. Here’s a brief excerpt:

An interesting portrait of homeowners emerges from my analysis. While homeowners report higher life satisfaction, more joy from both home and neighborhood and better moods on an unadjusted basis, these promising differences become insignificant and much smaller in magnitude once I control for a basic set of confounding factors: household income, housing value and health status. Overall, I find little evidence that homeowners are happier by any of the following definitions: life satisfaction, overall mood, overall feeling, general moment-to-moment emotions (i.e., affect) and affect at home. The average homeowner, however, consistently derives more pain (but no more joy) from their house and home. Although they are also more likely to be 12 pounds heavier, report a lower health status and less joy from health, controlling for the less favorable health status does not change the results. My findings are robust to controlling for financial insecurity. Therefore, unadjusted differences in homeowners’ well-being might have played an important role in establishing the popular beliefs about the American Dream.

To help understand these surprising results, I investigate the homeowners’ time use pattern, family and social lives. The average homeowner tends to spend less time on active leisure or with friends, experience more negative affect during time spent with friends, derive less joy from love and relationships and is also less likely to consider herself to enjoy being with people. My results support neither the perception of gregarious homeowners nor that of housework-burdened homeowners. In this paper, homeowners are also shown not to be significantly different in terms of civic participation or social connectedness.

From Grace W. Bucchianeri, “The American Dream or The American Delusion? The Private and External Benefits of Homeownership.”


http://www.dollarsandsense.org/blog/2009/10/homeownership-not-all-it-cracked-up-to.html

[slackmaster]

1. I skimmed the report - It looks like gobbledygook and rationalization

The joys of not having to deal with an asshole landlord or the specter of having to move out on 30 days' notice are more than enough benefit for me.

[gratuitous]

3. I'm guessing this study isn't "the last word" on the subject

But there are balances and offsets that each person should take into account depending on one's own individual circumstances. Home ownership has long been held up as the sine qua non of the American Dream. I really think that it's not for everyone, though there are your compelling points about landlords and the possibility of a 30 day notice that could be stapled to your front door at anytime.

I've signed for a couple of mortgages in my time, but I have never felt like I'd made a final move. I know that someday I'll move out of my present house and someone else will move in. As such, I have more of a sense that I'm a caretaker for something that will be passed on to someone else. I like the stability of being in my own house, but as long as I'm paying a mortgage, some other entity's name is sharing the title to the property.

This study isn't the final word, but I think it's useful to consider an alternative viewpoint to the conventional wisdom that home ownership is the be-all and end-all of American life.

[kestrel91316]

2. I don't intend to own again until I retire. This RE market is far too unstable

to risk any money in it. I bought high and sold low once. Not chancing it again.