Why Do We Buy Real Estate?
Why do you own your home? Why do you want to buy a home?
According to Fannie Mae the top five reasons people buy a home or aspire to buy
a home are: To have a better place to raise their children; A place where their
family can feel safe; To have more space; Freedom to renovate to their own
taste; and Owning is a better investment. Does this hold true for you? How
about for a friend or family member you are close to? I know that all five
reasons were a factor in my personal decision to own a home rather than rent.
While I do think that sometimes for some people it is better to rent than own
(or possibly it is the only option), the vast majority of the time there is no
question it is better to own than rent.
The reasons we buy a home have
stayed constant throughout the recovery of our real estate market and are
strengthening all the while.
Freedom
People have to live somewhere and at
least in the United States, people want to own where they live. It has a lot to
do with freedom. We are a free nation with citizens who strive for financial
freedom, enjoy their religious freedom, freedom to say what we want, etc.
Something about owning your home gives you freedom.
Every day I work with people who are
buying a home and they all have their own unique set of circumstances. Some are
newly married and are ready to start their life together. Some need more space.
Some have the means to buy a home in a special location to enjoy the beauty of
the oceans or mountains. Either way the drive to own is strong.
Recovery
Let’s face it; we have been through
tough economic times in the past several years. Many of us have been caught in
the midst of short sales, foreclosures and even bankruptcies. The first
question I’m asked by someone who has been through a tough time is “how long do
I have to wait before I can buy another house?”
The
American Dream
In 1931 the phrase “The American
Dream” was defined by James Truslow Adams, historian and author, in his book Epic
of America- “…life should be better and richer and fuller for everyone,
with opportunity for each according to ability or achievement”. Homeownership
is a very strong part of the American Dream.
We have all read books, seen movies
and heard stories about immigrants who have come to America in pursuit of a
better life in a society that allowed them to better themselves based on their
own ability and achievement. Most of these people were coming to America from a
society that was without opportunity because the class structure did not allow
for significant achievement…you pretty much stayed in the class in which you
were born.
In America that is not the case,
every day we have the freedom to make better choices, work smarter, work
harder, take risks, etc. all in pursuit getting to a better place than we came
from.
Financial
Strength
Owning a home is one of the best
ways to better yourself as judged in financial AND non- financial terms. For
example, according to the Federal Reserve (2012), on average, Homeowners have a
total net worth over thirty times greater than those who rent their home. For
most of us the equity in our home is the biggest asset on our balance sheet.
Other
Factors
Some of the non-financial related
ways we are better off owning a home versus renting include having more room
for our growing family by way of buying a bigger house or adding on to our
current house… if you rent, your landlord is not likely to allow you to knock
down walls and add on to your apartment.
Another way we are better is by
having the ability to choose where we want to live. Location is the
single most important variable that affects the value of real estate, there is
good reason for this…if the location is unsafe, polluted, noisy, high-traffic,
prone to flooding, etc. then it less valuable than a location which is safe,
quiet, convenient, dry, etc.
Achieving the American Dream is a
noble pursuit. I would argue that owning your own home is one of the very best
ways to live that Dream. It isn’t the only way but it is so important
psychologically and financially that it helped make the USA the wonderfully
free and prosperous nation it is and will be.
Why do you own your home? Why do you
want to buy a home? Go out and achieve the American Dream!
