Are Homeowners Happier Than Renters?

Does homeownership bring happiness?

Homeownership is a pillar of the American Dream. But how much weight does it carry in the pursuit of happiness?

Apparently, quite a bit. A 90% share of homeowners said they’re happier overall since buying a house, according to research from Home Bay.

If you’re on the fence about purchasing property, read on to see what brings — and doesn’t bring — homeowners joy.

Measuring homeowner happiness

By and large, homeownership brings more satisfaction than renting.

In fact, 90% of homeowners said they are happier since owning a home and 78% said they’d never rent again, according to Home Bay, a Clever Real Estate publication. For the analysis, Home Bay surveyed 500 homeowners and 500 renters in the U.S.

Surveyees scored the overall happiness level of homeowners at 88% compared to 67% for renters. Homeownership overshadowed renting across all one dozen individual aspects, with the trio of stability, net worth, and living situation each receiving scores of 90% for owners versus 73%, 72%, and 67% for renters, respectively.

When rating their personal satisfaction on a 1-10 scale, homeowners averaged 7.4 for quality of life, 7.13 for mental health and 6.86 for physical health. Meanwhile, renters averaged 6.22 quality of life, 6.01 mental health, and 5.97 physical health.

“Homeownership appeals to Americans because it scratches several itches at once: the pride you take in having a home of your own rather than renting from someone else, the ability to build equity in your home over time, the security of a stable place to live, and the freedom to customize your home to suit your needs,” said Trent Seigfried, lead data analyst at Clever Real Estate.

Advantages and disadvantages of homeownership

Owning a home isn’t for everyone, of course. Just like anything else, it comes with pros and cons.

In the report, a 14% share of homeowners chose privacy as the single biggest benefit of owning property. Building equity followed at 12%, then came more stability at 11%, ability to modify your home at 10% and no landlord at 10%. Renters had the same top three, with more stability receiving 16% of votes, privacy with 12% and equity at 10%.

Building equity in your home is a common way people gain wealth and a primary reason homeownership gets widely pursued. Your home equity grows both alongside home values and with how much you pay off your mortgage. Equity can be tapped into for a variety of reasons in multiple ways. And, if used prudently and correctly, can help expand your net worth.

Perhaps in part because of this financial cushion, homeowners reported an average stress level of 5.12 out of 10, compared to 6.24 for renters. A 53% share of homeowners also said they enjoy seven or more hours of free time per week, versus 40% of renters.

On the flip side, expenses and personal challenges can account for the disadvantages of homeownership. Among 16 drawback options, a 64% share of homeowners pointed to property taxes, while 56% said being responsible for repairs, and 54% said ongoing maintenance. High upfront costs (36%) and bad neighbors (34%) rounded out the top five.

Navigating the housing market

Between few listings and high interest rates, both home buyers and sellers face challenging conditions in today’s housing market.

While inventory started showing signs of an upcoming recovery and many experts anticipate mortgage rates to gradually decrease over 2024 and 2025, not every prospective buyer can wait for those stars to align.

Fortunately, you can take steps to boost your profile, qualify for financial assistance, and potentially assume someone else’s mortgage rate.

“Home buyers should expect a higher interest rate mortgage than they would have expected in the last decade, which translates into higher monthly mortgage payments. How can a potential homeowner combat that? Make sure you have a healthy down payment, keep your credit score high by keeping your bills paid, and understand what you truly need versus what is ‘nice-to-have’ when shopping for a home,” said Seigfried.

The bottom line

It’s no wonder why many people hold up homeownership as a major life milestone.

Owning a house can usher in financial security and create generational wealth, while bolstering mental health and stability, as the report showed.

If you’re ready to take the leap from renter to homeowner, reach out to a local mortgage professional — and be ready to negotiate!