By Kevin Reskey
That could be troubling news for the region since higher home ownership rates benefit the community as much as home ownership benefits individuals emotionally, physically and financially. According to the National Association of Realtors, there are several important benefits to owning your own home, including:
- Higher educational performance for children
- Greater participation in civic and volunteer activities
- Lower crime rates
- Better-maintained neighborhoods
Bank of America recently released the results of its Homebuyer Insights Report, which explores the attitudes, preferences and behaviors of the modern home buyer. The study found that 93% of those who have bought a home say they’re happier because of it, and 83% said they wouldn’t go back to renting. While many recognize the financial benefits of home ownership, 82% say they also derive satisfaction from the time they spend on hobbies and passions since purchasing a home—including new pursuits, such as gardening, cooking and interior design.
Beyond hobbies, 78% say they feel satisfied with the quality of their social life and credit home ownership with their improved ability to entertain and gather with friends and family.
Given the interest rates have fallen in recent months to relatively low levels, we may see home ownership start to climb.
Whether to Rent or Buy
Some potential buyers on the cusp of home ownership may be weighing the pros and cons of buying versus renting. There are benefits to each, with renting allowing for greater ease if you’re planning on relocating frequently and requiring less money up front. But, rents are climbing in San Diego, and Zillow calculates that it’s actually cheaper to buy than to rent in the San Diego area if someone stays in their home for just four years and eleven months (based on San Diego County’s average monthly rent of $2,048 and average home price of $592,000). Plus, homeowners can begin to build both the emotional and financial equity of home ownership and, if they have a fixed-rate loan, their monthly mortgage payment will stay the same, not rise like rent often does.
Unfortunately, many prospective buyers fear the upfront costs and self-select out of home ownership without getting all the details. In fact, 69% of prospective homeowners say the biggest barrier to home ownership is saving enough money for a down payment and closing costs. The good news is, solutions exist to give prospective buyers the power to get over this hurdle.
My company is doing its part to help. Bank of America recently launched a $5 billion affordable home ownership initiative to assist more than 20,000 individuals and families overcome buying hurdles. Benefits include a new down payment grant program that gives eligible borrowers up to $10,000 to be used toward their down payment as well as other savings.
Increasing home ownership in the San Diego area will be a win-win for home buyers and for our communities and our economy.
Kevin Reskey is senior vice president and division executive for consumer lending at Bank of America in Southern California.
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