Homeownership comes with all sorts of struggles that renters never deal with. If you rent and your roof leaks, for example, a call to your landlord fixes that (or it should). You don’t have to worry about unexpected expenses, fluctuating property values, or much of anything else.
Despite the advantages of renting, 93% of Americans said they're happier after buying a home, according to the latest Bank of America Homebuyer Insights Report. In addition, 83% said they would never go back to renting.
"The latest Homebuyer Insights Report confirms what we suspected: Owning a home makes us happier for two reasons -- building personal wealth and making valuable memories," said AJ Barkley, Bank of America's Head of Neighborhood Lending, in an email to Millionacres.
Most homeowners credit their happiness to an emotional attachment to their home, but, interestingly, they are also more satisfied with their financial well-being than non-owners. Ultimately, no matter how Americans define home, they agree it is a way towards a more stable, happier, way of life.
If it makes you happy
Homeownership has long been a part of the American Dream. The idea that you’re supposed to buy a home as you start a family has become ingrained in American culture. It’s a right of passage that shows a level of financial success and emotional maturity, as it’s not always an easy process to navigate.
More homeowners (77%) reported being satisfied with their financial well-being than non-owners (42%), according to the report. In fact, over two-thirds of respondents said that "their relationships with family and loved ones have changed since purchasing a home." 50% said they felt "a restored sense of family pride and attachment to loved ones."
Essentially, even though owning a home comes with a certain level of stress, it checks off other boxes that make the stress worth it. It’s not just about the perceived financial security that owning a home brings, it’s also about putting down roots and having a base for your family.
How to be even happier
Nothing ruins happiness like financial strain. That’s why homebuyers should act rationally and not let emotions cause mistakes that could have a long-lasting impact.
The first thing to do is make sure you can afford the home you buy. Many recommend the 28% rule. That means no more than 28% of your gross income should go to paying your mortgage each month. Lenders may use that number to consider whether to approve your mortgage. Of course, if you spend less, that could be even better.
If you buy a home you can easily afford, that leaves you money for the future if things go wrong. It also lets you build up an emergency fund and replenish savings depleted from a down payment.
People often assume their income will stay the same or keep climbing and are tempted to buy the most expensive house they can afford. That’s a dangerous decision, as nobody can predict when they might face a personal crisis that impacts their income.
If you want your home to make you happy in the long term, make sure it never becomes a financial burden. One way to do that is to aim in the middle or toward the bottom of what you can afford when making the purchase.