Homeownership in America

T.S. Elliot once wrote: "Home is where one starts from."

As Realtors®, 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.

As of 2018, America's homeownership rate is at 64.8 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 46 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 normal 10 percent market rate of return would yield $23,600. The same investment as a down payment on a $200,000 home at a normal 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.

Visit the ECAR web site at easternctrealtors.com.

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