Good News Greets Homebuyers in June
By Phillip B. Burum
Home shoppers greeted the final month of our season-long celebration of homeownership with National Homeowner’s Month with some good news. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), lower home prices, declining mortgage rates and solid income gains contributed to a rise in housing affordability in the first quarter of 2019.
In addition, according to recent reports by CoreLogic, Inc., a major California-based corporation providing financial, property and consumer information; San Bernardino County still anchors home affordability in Southern California with a median home price of $336,000 – the lowest of six Southern California counties at nearly half of the average home price in the coastal regions.
In June, we celebrate the ‘big picture’ of the benefits of home ownership because its reach is far and wide, extending from the individual to the broader community.
For most Americans, homeownership offers both the biggest and best investment they will ever make. The equity gained in home ownership represents the largest share of most family’s net worth. Lawrence Yun, Ph.D., reported in Forbes Magazine that according to the Federal Reserve’s Survey of Consumer Finances, a typical homeowner’s net worth was $195,400, while that of renters was $5,400 as of 2013. A typical homeowner, he added, “will be ahead of a typical renter by a multiple of 45 on a lifetime financial achievement scale.”
Homeownership is good for the economy. Homeowners buy multiple homes over their lifetime and in the process contribute to economic growth and job creation. With each home sale, beyond the income and benefits to the professionals involved in designing and constructing the home, there are additional, and typically local, expenditures related to home sales, including, landscaping, home improvements, furniture and appliances.
The reach of the economic benefit of the new home industry is much larger than most would imagine. In San Bernardino County, if new home construction were to keep up with demand, the direct economic impact to the region would result in a surge of over two billion dollars this year alone. New home construction is a major economic engine. More than 80 individuals are involved in the construction of a single-family home and, on average, seven new jobs are created for each new home constructed.
The social impacts of home ownership are undeniable as illustrated in a recent study from the Boston Federal Reserve which found that the income of homeowners’ children rises if home values rise, speculating that housing equity permits more human capital investment.
In the Forbes article noted above, Dr. Yun writes “(r)esearch on the subject has found that, other things being equal, children of homeowners do better in school (higher test scores and lower anti-social behaviors). Lower crime and lower drug usage were among the findings for the children of homeowners. Homeowners are more likely to be involved in community civic engagements, local elections, and volunteer work compared to renters –again with other things being equal. Health outcomes are also better with homeowners”.
Homeowners are also considered better credit and employment risks which translates to greater economic security for homeowners’ families. For instance, last year, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Census Bureau reported that homeowners and their families enjoy greater “food security” than families of renters. The American Housing Survey – the most comprehensive housing survey in the United States – showed that 15.5 percent of renters were food insecure, meaning they had “low” or “very low” food security as opposed to only 4.9 percent of homeowners.
An individual can debate timing or contrast mobility with being rooted but, for children and the community at large, there are few better opportunities to create a positive environment, economically and socially, than owning one’s own home.
The BIA Baldy View Chapter seeks to advance the opportunity to attain the American Dream of home ownership. For more information on the benefits of homeownership or how you can advocate for new home construction, visit www.biabuild.com.