The creation of wealth, as well as the accumulation of assets, plays a significant role in both the improvement of our communities’ quality of life and their economic autonomy. The possibility of one day being able to call one’s own house “home” has long been regarded as an essential component of the achievement of the American Dream. At the same time, the creation of one’s own financial stability has been considered an essential component. It is necessary to rethink what it means to be a homeowner in light of this and other developments in the housing market that have occurred recently. A significant portion of the inventive forms of financing has significantly exceeded the bounds of common sense and practicality.
Which of these is not a responsibility of home ownership
A. being a good neighbor
B. getting an appraisal done annually
C. keeping your home properly insured
D. keeping your home safe and secure
E. regular home maintenance
Being a good neighbor is not a responsibility of a homeowner. Therefore, A: is the correct answer.
Why is home ownership important?
When a person reaches adulthood, one of the ways they can symbolize the stability, independence, and freedom that come along with it is by purchasing their own home. Even though this perception might be shifting slightly as more people put off buying homes for longer periods of time, reaching this point is still regarded as an important milestone for a variety of reasons. The provision of one-of-a-kind opportunities to increase one’s wealth is the primary reason behind the widespread belief that real estate is an excellent choice for financial investment.
A person’s range of options for the future is increased when that person buys a home, regardless of whether or not that person intends to sell the property at a profit or to use the equity in the property as a source of funding for other significant expenditures in the future.
Economic benefits of home ownership
- The investment opportunity that being a homeowner provides for many different families is a significant driving force behind the goal of becoming a homeowner. A significant portion of the wealth of a typical American family is held in the form of equity in their primary residence. According to findings from recent studies, the equity in owner-occupied housing accounts for 44 percent of white households’ total net worth, while it accounts for 61 percent of the net worth of both African American and Hispanic households.
- When compared to returns on other investments, the return on after-tax equity for housing is very attractive. According to Burbidge (2000), the capital gain on housing for relatively low-wealth households that are only able to scrape together a small downpayment is higher when measured as a return on the equity that was invested.
- In addition to this benefit, diversification of a household’s overall investment portfolio can be accomplished through the purchase of real estate.
- Homeownership protects households against the possibility of experiencing significant increases in the cost of renting a dwelling.
- The preparation of a household for homeownership and the achievement of homeownership both offer significant advantages for the savings behavior of households. In a general sense, the theory of economics suggests that young households are not very good at saving money. However, the act of buying a home encourages a young household to save to pay for a downpayment on a home and other relocation costs.
- Haurin et al. (1996) indicate that households preparing to purchase a home increase their labor supply, thereby increasing household income.
- Homeownership appears to have positive effects on job market outcomes in addition to increasing labor force participation. These other positive effects on the job market include: According to a number of studies, women, including mothers, who own their own homes have a significantly higher rate of employment overall.
What are the disadvantages of home ownership?
- It is common for the monthly cost of a mortgage, utilities, and maintenance to be higher than the cost of renting a property of comparable size and type. However, depending on the specifics of the situation, purchasing a home rather than renting may actually be the choice that results in lower overall costs.
- There is no way to know for certain whether or not the value of your home will increase over the next few years. It is possible that the value of your home will go down as a consequence of changes in the conditions of the market, the naturally occurring deterioration of the property, or other factors.
- When you rent an apartment or home, it is the responsibility of the landlord to make any necessary repairs. If you own a home, you are responsible for all of the upkeep and repairs, but you also have the option of hiring someone else to take care of these responsibilities. Small problems, like loose shingles and clogged drain pipes, need to be fixed as soon as possible to prevent them from becoming larger and more expensive problems in the future.
- It is typically impossible to move to a new location if you are the owner of a home until you either sell the property or rent it out to someone else. The process of selling a product or service can take a few months, or even longer in some cases. If you are behind on your mortgage payments, the lender has the right to foreclose on your home and require that it be sold in order to pay off the remaining balance of the loan. This can happen if you go for more than a certain amount of time without making a payment. If something like that happens, you run the risk of losing not only your initial down payment but also any equity you have built up over the years in the property you are purchasing. Because of what happened, your credit score is going to take a hit that lasts for at least seven years.
- At some rental properties, a portion of the monthly rent goes toward the use of the various amenities provided by the complex, such as the swimming pools, clubhouses, and playgrounds. It’s possible that if you don’t buy in a cooperative or condominium, you’ll have to make do without some of the luxuries that come standard in apartments, or you’ll have to pay more to get them if you want them.