June marks National Homeownership Month, a time to celebrate the benefits of owning a home. Homeownership is not just about having a place to live – it's a cornerstone of financial stability, community development and personal well-being. This month, PCRG will reflect on the significance of owning a home and barriers of homeownership and highlight policies to increase homeownership.
One of the most compelling reasons to own a home is the financial stability it offers. Unlike renting, homeownership is an investment. Each mortgage payment increases your equity in the property, which can be a power asset over time. As property values appreciate, homeowners can see significant returns on their investments. Additionally, tax benefits such as mortgage interest deductions can provide substantial savings.
Homeownership is a key factor in building personal wealth. According to the Federal Reserve, homeowners have a net worth that is higher than renters. This wealth can be leveraged for other investments, education, or retirement. Over time, the value of owning a home grows, contributing to long -term financial security.
Despite the many benefits, homeownership remains a challenge for many. Rising property values, stricter lending criteria, and socio-economic disparities can make purchasing a home out of reach or staying in your home more difficult. Compounding matters is the influx of corporate backed purchasers of homes that scoop inventory and box out would be first time buyers. Additionally, rising interest rates have reduced both housing supply and demand, leading to fewer mortgage originations. This disproportionately affects low-income buyers, as higher monthly payments limit affordable options and existing homeowners are less likely to sell.
Efforts to increase access to homeownership are critical. This includes expanding affordable housing options, providing financial education, and offering down payment assistance programs. For example, PCRG has advocated for banks to create Special Purpose Credit programs, which are targeted financial incentives tailored specifically for low-moderate income buyers.
Keeping existing homeowners in their homes should also be a priority. According to a Pennsylvania Housing Finance Agency study, Pennsylvania has the oldest housing stock in the country — with over 60% of housing built before 1970. Home repair costs have skyrocketed, leaving many lower and fixed- income homeowners unable to make repairs. PCRG and other housing advocates across the state have pushed for more funding through the Whole Home Repairs program — which provides direct grants (up to $50,000) to qualifying homeowners for crucial home maintenance and repairs, like roofs, siding, windows and even utility upgrades. The program is oversubscribed and can’t meet application demands. In this year’s state budget proposal, Governor Shapiro proposed $50 million statewide wide for the program, which is a start, but not nearly enough to meet the demand.
The Biden Administration has worked hard to eliminate homeownership barriers faced by minority home buyers by combatting racial bias in the home appraisal process. The Property Appraisal and Valuation Equity (PAVE) is a multiple agency initiative to combat racist and unfair practices by appraisers that manipulate the values of homes to discriminate against minority homebuyers.
Additionally, President Biden has urged Congress to act on increasing home ownership opportunities, including a tax credit of $10,000 for first -time home buyers. He has called for the passage of the bipartisan Neighborhood Homes Investment Act, which would close the development gap for rehab, or construction of single-family homes in distressed communities.
Homeownership is more than an American dream; it’s a powerful engine for economic stability, personal wealth, and community vibrancy. As we celebrate National Homeownership Month, let’s acknowledge the importance of homeownership and work towards making it a reality for more people. Investing in homeownership is investing in our collective future — a future of stability, prosperity and thriving communities.