T.S. Elliot once wrote, “Home is where one starts from.” Homeownership has a rich history in America, and one for which so many are grateful.
Over the Thanksgiving holiday, I, too, reflected on the things for which I am grateful. In particular, I gave thought to the many blessings that stem from being a Realtor. We are in the business of giving people a place to start from – no matter where they come from and no matter what their background. Helping people realize the American Dream of homeownership makes a positive difference in the personal lives of buyers, as well as for the country as a whole. Throughout history, homeownership has played a major role in the growth of our nation’s economy.
America’s homeownership rate hovered around 46 percent between 1900 and 1920, before declining to a low of 44 percent by 1940. After World War II, the homeownership rate rose dramatically – to 55 percent by 1950 – as the postwar economy boom contributed to American prosperity.
Purchases of homes were central to building that prosperity, and by 1960, homeownership had grown to 60 percent, thanks to favorable tax treatment and attractive financing related to homeownership.
Today, America’s homeownership rate approaches 64.4 percent, according to the U.S. Census Bureau. Homeownership offers immediate benefits and long-term value. Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they can use, improve, and sell. Their home is a safe haven for investment.
Homeownership is how many American families begin to accumulate wealth. According to data from the Federal Reserve Board, a homeowner’s net worth is 36 times that of a renter’s.
Local housing markets may experience temporary price declines as well as rapid price increases in the short term, but over a typical six-year period of homeownership, home values usually rise at a normal, gradual pace. Exceptions to this general trend almost always result from prolonged localized economic downturns, often driven by job and population losses.
Homeowners also benefit from the power of leverage. Over 10 years, a $10,000 investment in the stock market at a 10 percent market rate of return would yield $23,600. The same investment as a down payment on a $200,000 home at an appreciation rate of 5 percent would return nearly five times the stock market return, at $110,300.
Housing is not a quick-in, quick-out investment. When purchased for the long term, housing is one of the safest investments consumers can make. In addition to the savings accumulated through a buildup of equity and tax advantages, a home provides shelter. No paper investment provides this benefit.
As a Realtor, I continue to be thankful that our profession provides so many benefits, not only to our clients, customers, and the Greater Chattanooga community, but also to our nation.
The Greater Chattanooga Association of Realtors is “The Voice of Real Estate in Greater Chattanooga.” The Association is a regional organization with more than 1,400 members, and is one of more than 1,400 local boards and associations of Realtors nationwide that comprise the National Association of Realtors. The Greater Chattanooga Association of Realtors services Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade, and Walker counties in Northwest Georgia. For more information, visit visit www.gcar.net.