Homeownership benefits millions of Americans across the country. In addition to having a place to call home and a sense of community, many people purchase homes to build wealth. A primary residence was the largest asset among households across age groups in 2019, according to the 2019 Survey of Consumer Finances. How does housing measure up to other investments, like the stock market? Not surprising, many Americans view homeownership as a sound investment to provide financial security.
Why invest in Housing?
The Federal Reserve Bank of New York found that most households view home ownership as a good investment in comparison to the stock market. This is even more important if they belong to the middle class. If asked whether a young couple should buy a home or invest in the stock market more than 90% of the respondents chose housing. The survey was run in February 2020 (largely before the COVID-19 outbreak in the United States), October 2020 and February 2021.
What makes people decide to buy homes? Many respondents viewed rental property as another viable pathway to generate income or capital. When choosing between investing in a rental property or the overall stock market, more than 50% chose housing each time they were surveyed. In making this decision, most respondents reasoned that “desired living environment and provides stability,” and that “housing prices are less volatile [then stock],” were major factors in their opinions.
Americans view housing, either as a primary residency or income property, as a good investment compared to the stock market. Housing is an especially important asset class for middle-class households. Homeownership benefits millions of Americans across the country. Many homeowners count on home equity to fund retirement, their children’s education, and other important needs. In addition, owning a home represents a big part of the American Dream and provides a solid foundation for families. To learn more about home buying or homeownership, visit nahb.org. To find local experts in your area, visit your local Home Builders Association.
President, Greater Fort Smith Association of Home Builders