For years I’ve heard this said at closing; “I’m going to sign my life away”. To which I would reply; “No, you are securing your future”. This article backs me up. Jay Richardson, RREA
February 24, 2011 by Selma Hepp, Research Economist
A recent analysis by a group of researchers from the University of North Carolina at Chapel Hill Center for Community Capital tested whether there is a relationship between homeownership and the degree to which people feel they have a sense of control in their lives. The authors hypothesize that homeownership can provide people with a sense of security and stability which translates to greater confidence handling problems. Read the full commentary after the jump.
The results show that homeownership does increase sense of control, though the effect was small. While it is possible that the financial pressures associated with homeownership in a current downturn economy have reduced the psychological benefits of homeownership, the authors used data collected in 2008 and thus were able to examine the homeownership affect well after the onset of the housing downturn and subsequent economic recession. And given that homeownership still produced a greater sense of control during this time period, the authors expect the effect would be ever larger during a non-recessionary economy.
Other significant factors found by the analysis to be associated with a higher sense of control are: being male, being in good or excellent health, having an advanced degree as opposed to a high school degree or less, having a higher relative income, and being retired. And, sense of control is also increased by having savings and being able to access money in an emergency. Interestingly though, even when accounting for whether a respondent had a major unexpected expense, a trigger event which could lead to declines in one’s sense of control, the homeownership effect remained significant. Thus, as the authors conclude, while the effect of homeownership is not large, it suggests that owning a home gives people an intangible sense of security and control over their lives that goes beyond the financial security or financial benefits of homeownership.
Source: Manturuk, Kimberly. and Quercia, Roberto. “Homeownership and Global Perceived Stress in a Downturn Economy: A Propensity Score Analysis” Paper presented at the annual meeting of the American Sociological Association Annual Meeting, Hilton Atlanta and Atlanta Marriott Marquis, Atlanta, GA, Aug 14, 2010