As of 2010, approximately 67% of Americans lived in homes they owned. However, the severe economic downturn that begun in 2008 and serious problems in the U.S. housing market have prompted many people to wonder whether owning a home is really such a good idea. Write an argument on whether the government policy should not encourage home ownership and whether it is better to own a home or to rent? Are there any long term benefits of renting? What are the pros and cons of owning a home
Many people are confused when deciding on whether to rent or own a house. Currently, homeownership is at 63.7%, the lowest it has ever been in 48 years in the United States. The statistics may either show an increase in the number of people renting houses or a decrease in those owning houses. However, in the past, people had to construct their own houses or rent from other people. Some people preferred to rent while others built their houses. Today, both decisions depend on an individual’s preference. The two decisions have their sets of advantages (Haury, 2017). However, renting of houses is considered more advantageous than owning of houses. Therefore, renting houses has an edge over owning because there are no additional costs, it is more flexibility, and the renters are not at risk when an economic recession occurs.
Reason and Evidence
Unlike homeowners, renters are not faced with maintenance or repair costs on their houses. When one rents a property, all costs on repair and maintenance are the landlord’s responsibility (Haury, 2017). The renters only pay the fixed amount they agreed on the property with the property owner. The renters may only be involved if they are willing to do so. As Loewen (2012) identifies, some of the repair and maintenance costs such as roof repairs, painting, plumbing problems, and electrical issues are quite expensive. When renting, people can avoid these costs (Loewen, 2012). The landlord pays all the costs for the expenses while the renter continues paying the agreed fixed amount.
On the other hand, homeowners have to offset these bills because they are responsible for their repairs, renovations, and maintenances. The process can be quite expensive and it explains why renting is a better option to owning because of the additional repair costs.
Additionally, renting of houses affords individual the flexibility of downsizing when one prefers to change environments. According to Haury (2017), individuals who have rented houses have a ‘downgrade’ option to a house or living space that is affordable when struggling financially. Renters are not obligated to live in the houses they rent and thus can move out any time they wish.
As a result, the renter can move to a smaller house when financially down or move to a bigger house if they have the ability. Renters easily change houses or environments when they want to or when fortunes change (Loewen, 2012). With the change in environment, renters can move at any time to any place they wish. Interestingly, homeowners cannot afford the privileges of renting because they have to wait for long durations to sell their houses to obtain funds that can be used in purchasing another house. The example shows that renting offers people more flexibility.
Furthermore, renters are also not at risk if the value of the property they are living in decreases or even when economic depression occurs. When a recession occurs, the market slows down, and the prices of houses fall (Loewen, 2012). The renters are not affected since it is the owner of the property who is affected. Homeowners, on the other hand, have to continue mortgages for their homes, which may have little or no equity.
Haury (2017), emphasizes that renters are less affected when prices of property decrease. The owners, in contrast, who are the most affected by the decrease in the value of property means they have to pay the mortgage for a property that has lost some value. Homeowners may face foreclosures due to defaulting mortgage payments (Loewen, 2012). Such cases do not affect renters, and in case of a foreclosure, one can easily change houses. Therefore, the renters are always safe should a recession or value of a property reduce.
Moreover, renting houses is ideal over owning due to the various advantages that it offers individuals and their families. According to Haury (2017), renting allows individuals the access to various amenities, which would be expensive to most homeowners. For instance, fitness centers and in-ground pools are available to renters, and this ensures that their families have a great experience and not just living. Every person would always want their families to have the best experiences. Ideally, owning a house may require one to obtain a huge loan like a house mortgage (Gaskill, 2015: Wachter & Acolin, 2016). Many people end up paying lots of money that maintaining their families or even paying bills become a problem. As a result, an individual and even their families may end up suffering while this could have been avoided by renting. Moreover, renting allows for upsizing should one’s family grows (Gaskill, 2015). A family can move to a bigger house if there is a need to when they have rented. However, when one owns a house, they have no option but to remain in the same house even when the family grows since buying a larger home would be expensive. As a result, the family ends up ‘squeezed’ in the small house.
However, despite risks of additional costs such as in maintenance and repair, owning a house leads to greater wealth generation. As a result, owning a house is the pathway through which a person can get out of poverty. According to a study by Journal of Housing Studies, as equity for homes increases, homeowners may decide to go for additional education for their children or even themselves because they have the resources (Millsten, 2018). The data explains why homeownership leads to increasing resources instead of depleting the resources. Otherwise, homeowners would not have the ability or resources to further seek education or even for the children. The argument proves that despite the expenses, homeownership leads to greater wealth generation.
Furthermore, unlike in renting where prices may rise, homeowners pay only the agreed amounts in the mortgage. According to Zillow (2018), when a homeowner purchases a home and obtains a mortgage with a fixed rate, the mortgage payments remain the same always. For this reason, the homeowners only have a fixed amount of money they pay monthly.
Renters, on the other hand, are uncertain about the rates of renting as they keep on increasing now and then. As Zillow (2018) identifies unless one is living in buildings that are rent controlled, they risk having their rents increasing every year. Therefore, the belief that renters pay a fixed amount is uninformed since the renters are uncertain on what they will pay as rent in the years to come. Consequently, while homeowners may know what they will spend on the mortgage payment, renters may be uncertain given that the prices of rental houses keep increasing every year.
In short, renting of houses is considered ideal to owning one. Renting allows individuals flexibility. Renting also shifts the additional cost to the property owner. Ideally, no one would want their family to live in a small house despite their family having increased. However, renters can upsize to a bigger house should such a case occur. Also, renting enables individual access amenities that homeowners cannot afford. Therefore, when deciding on whether to rent or buy a house people ought to consider renting as the ideal option.
Gaskill, L. (2015, August 22). 10 Reasons To Rent And Not Buy.
Haury, A. C. (2017, March 15). Reasons Renting Is Better Than Buying.
Loewen, M. (2012, June 7). Rent vs. Own: 6 Reasons Why Renting is Better than Homeownership.
Millsten, E. (2018). Beneficial impacts of Homeownership: A research summary.
Wachter, S., & Acolin, A. (2016). Owning or Renting in the US: Shifting Dynamics of the Housing Market
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