Late on a Friday afternoon a few summers ago, the temperature was approaching ninety degrees and my air conditioner was singing, and not in a good way. Sure enough at the end of what sounded like a final chorus the air conditioner stopped. Why does this always happen on what seems like the hottest day of the year? Why did I ever think home ownership was a good idea?
Ah, the joys of home ownership. Why does anyone want to own a home when renting is so simple? If something goes wrong you make a call and someone comes over to fix whatever is broken.
Shortly after college graduation I rented my first apartment and probably would have gone on renting, except my father kept pointing out that all I was doing was paying off someone else’s mortgage, when I could be building equity for myself. After a couple of years as a happy renter, I became a condo owner, sort of, the bank owned more than I did.
Advantages of home ownership:
Many cite the home mortgage interest deduction. The interest you pay on your loan is deductible on your income tax as long as you itemize and the interest in greater than your standard deduction. In this way the government is helping you buy your home.
Owning a home can be a way to save money as long as the neighborhood your home is in remains desirable and the home values go up or remain consistent with your purchase price. Plus, as you build equity you can borrow against that equity to improve the property or for any reason you choose.
As a renter you can get priced out of the rental market. My grandmother sold her home when she was in her mid-60’s thinking she no longer wanted the responsibility of home ownership. She rented a beautiful apartment in a nice neighborhood. The problem started when the nice neighborhood became more and more desirable and the rent went higher and higher until she could no longer afford to live there on her fixed income. Luckily my parents were able to buy her a lovely condo, which she lived in until she died at age 95. My parents doubled their money on that condo, so the savings theory worked for them, but it doesn’t always.
Advantages of renting:
A friend of mine recently moved into a rental unit where she and her husband are the caretakers of the four family building. When I expressed my surprise and asked if they had sold the home they had been living in she told me that it was a rental. They’d sold the home they owned a few years earlier and felt much freer not being responsible for repairs and increasing real estate taxes.
Another friend lived in a town where her husband had a job with a plant that closed when the majority of jobs were sent overseas. While there was other industry in the area where they lived, selling the house was very difficult, and limited their family’s options.
Over sixty percent of Americans still own homes, but the percentage is falling. For some home ownership is a cornerstone of their life, others just don’t want it. The reasons are as varied as the people who live in the homes, rented or owned.