In good times and in bad, homeownership consistently maintains a strong link to the building of personal wealth for Americans. This is the conclusion reached by researchers at The Harvard Joint Center for Housing Studies, after revisiting their previous study from 2009.
The report citing the updated analysis, “upholds the bottom-line result from the earlier paper: that homeownership was associated with significant gains in household wealth, even when viewed across the tumultuous housing crisis period of 1999-2013.”
The authors reached identical conclusions from both generations of the report. Namely:
- Even during market downturns with extremely volatile house prices, a majority of the home owners who were able to stay current on their mortgages, created substantial wealth for themselves in the process;
- Renters who bought homes and stayed current on their mortgages through the recession had some of the largest gains in wealth; and
- Renters who bought homes but weren’t able to maintain their payments, were no worse off financially than before they purchased a home.
Content of the updated report can be found at Update on Homeownership Wealth Trajectories Through the Housing Boom and Bust.
Authors of the report commented that, “Taken together, the study’s findings of both the remarkably and persistently low wealth levels of the typical renter and the potential for wealth accumulation when homeownership is maintained underscore the need for policies both to support sustained homeownership as well as to help renters find ways to build wealth outside of homeownership.”
To quote Yogi Berra, “It’s deja vu all over again.”