Renters or Owners, Who Is Happier?

I referenced Steve Harney’s great blog in my article What Is Your Louisville Home Worth? earlier this month and now I’m back at it again. He’s just making too much sense.

Photo of Three Girls Playing by a Fountain
Does where you live affect the safety of your kids?

This time, Mr. Harney has a bone to pick with a Wall St. Journal article by Richard Florida (great real estate name, huh?) that promoted the idea that people who rent their homes are happier than people who own their homes. The article seems to be the single attribute of home ownership and tries to correlate that to happiness for certain U.S. cities.

Let me try to understand. The people in Detroit, St. Louis and Pittsburgh are less happy than the people in New York, Los Angeles, San Francisco and Boulder. And, the reason is because of home ownership rates?

He sounds incredulous! Then moves on to the generally held best practice for learning someone’s opinion… you ask them.

Let’s try a different way of determining whether renters are happier than homeowners. Why don’t we ask them? Fannie Mae’s National Housing Survey 2010 reported:

58% of current renters believe now is a good time to buy a house
75% of current renters believe owning a home makes more sense and
67% plan to buy a home at some point in the future

When they asked current renters for the major reason to buy a house, these were their answers (they could pick multiple answers):

78% said it was a good place to raise children
75% said because they would feel safe
70% said because you have control of your own space
66% said owning a home would be a good way to build wealth
54% said paying rent is not a good investment

There are times when renting makes more sense than buying a new home, such as estimated length of stay but the WSJ article seems to jaunt off in a bizarre direction.

This article is Dumb Reason #2 with more to follow next week. I recommend bookmarking Mr. Harney’s blog if you enjoy common sense commentary on the world of real estate.