As Bonner so eloquently noted, housing is one of the distinguishing characteristics of American life. Whether it’s a downtown apartment or a detached home in the suburbs, the home is an important aspect of cultural, social and economic well-being for most families.
In particular, homeownership offers significant benefits to families and communities. It is associated with higher incomes and greater social cohesion, and home equity is a principal source of both wealth and economic growth. It accounts for approximately 28% of household net worth in the United States, and an even higher percentage of the net worth of lower income households. Home equity also provides an important source of capital for other activities, such as home improvements and financing higher education and new business startups.
Unfortunately, homeownership and its advantages are not enjoyed equally by all Americans. The nation’s overall homeownership rate stands at 68%, but homeownership rates for African-American and Hispanic households remain below 50% even though minority homeownership is on the rise. This disparity is significant because it further widens the wealth gap between these groups and whites. With the price of housing serving as a major barrier to homeownership, many minority families are unable to accrue the home equity that provides financial security for millions of American families.
In addition to benefits to individuals, new residential construction also brings strong economic benefits to the nation’s communities. On average, construction of 100 single-family homes generates $11.6 million in new income to local businesses and workers in the first year of construction, and $2.8 million every year thereafter. It also creates 250 jobs in the local community during the first year of construction, and 65 jobs every year thereafter. In terms of their contribution to public revenue, these 100 new homes bring $1.4 million in additional local taxes and fees in the first year of construction, and $498,000 every year thereafter, for a total of $5.9 million over 10 years. As for individuals, the rewards to communities are significant and ongoing.
June is National Homeownership Month, a time to celebrate the many benefits of homeownership and redouble our efforts to ensure that homeownership is an attainable goal for all Americans.
Yelena Bonner closed her essay with simple, poignant words that transcend political boundaries and are echoed today by millions of American families. “I want a house,” she said.
As home builders, it is up to us to help ensure that every American who wants to own a home has that opportunity.
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