It’s cliché to say that money can’t buy happiness. Yet, as a Consumer Financial Protection Bureau (CFPB) survey indicates, having the financial stability to easily afford a home can improve your well-being.
Details of the Study
The “National Financial Well-Being Survey” looked at adults nationwide to measure their satisfaction and stability. It examined their characteristics related to household and family, income, employment, safety nets, savings and financial behavior and experiences.
On average, the typical adult scores a 54 on a 100-point scale. However, researchers found that a 35-point spread exists between the top and bottom 10 percent. Along with the point values, the CFPB defined “financial well-being” as the ability to address current and ongoing financial issues, feeling secure for the future and having more choices.
Results of the Study
For the population measured, one-third have well-being scores under 50 – a number indicative of financial hardship. Another third had scores above 61, a score reflective of one’s ability to pay for and meet basic needs. The remaining third fell right in between, scoring between a 51 and 60.
When it comes to homeownership and comparing homeowners to renters, the CFPB found that those able to afford a home tend to have better financial well-being. Specifically, homeowners averaged a 58 out of 100 on the scoring system and renters averaged a 49.
Homeownership isn’t always about wealth. Rather, those who had the means to purchase a home but did not own one tended to be in better shape. Those who spent a smaller percentage of their income toward housing also scored better. Between adults who spent 50 percent and 30 percent of their income, scores dropped from 56.51 to 46.5.
The CFPB further found that adults with non-retirement investments – with real estate being the most common – had higher well-being scores. From a financial standpoint, even if an adult doesn’t live in their investment, it tends to appreciate over time and help the owner build wealth.
However, homeownership isn’t the be-all-end-all of financial happiness. Amongst all factors examined, employment status, income, education and being older than 65 all correlate with higher well-being scores.
If you’re in the right place financially, why not make the step toward homeownership? To learn about toward our communities and custom homes, give us a call today.