7. Homeownership remains at the core of the American Dream
Americans still aspire to own a home - according to a recent Fannie Mae study - and for good reason. Owning a home is critical to financial stability and wealth building. The home serves as a forced savings account and provides a solid asset as well as a place to live; of course this is long-term thinking.
A vast majority of Americans feel that it owning a home is important for the economy and it is preferred to renting. The federal government has made a conserted effort to push home ownership sense World War II, and will continue to be so.As the graph below points out, the rent vs. buy equation needs to also take into account that rents are subject to increase every year, and mortgage payments remain fixed throughout the life of the loan*. Another key factor in the affordability picture is the federal tax deductibility of mortgage interest, which amounts to an annual savings of thousands of dollars for the average homeowner.
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