Common idioms claim that material wealth won’t bring you happiness, but what about home ownership? Millions of people aspire to own homes as part of their vision of a “happy” life, and as part of the American dream. But will owning a home actually make you any happier?
The Benefits of Home Ownership
According to On Q Financial, “Owning a home is one of the most common financial goals in the United States, and there are many reasons why. It’s a source of stability, it gives you control, it allows you to build equity, it reflects your style, and on some level, it’s associated with a feeling of success.”
Let’s explore each of these angles, each of which could potentially make you feel happier:
· Stability. Having a place to come home to every day, and keeping it in good condition, could give you a sense of stability and consistency, which is important to feel secure and content.
· Control. Buying a house, and changing its structure and appearance to suit your needs, also gives you a sense of control and empowerment.
· Equity. Buying a piece of real estate allows you to build equity, which can, in turn, help you build wealth overall, which can give you more buying power.
· Personal values. Depending on your choice, your home may also reflect your personal values, such as existing in a neighborhood that shares your philosophies.
· Success. Buying a home is an internal and external signal of success, which can make you feel both proud and accomplished, leading to greater satisfaction with life.
Subjectively, you might feel like these components are true, but you might be surprised to learn that research contradicts at least some of these perceived effects.
The Limits of Material Wealth
Many of the happy effects of buying a home are associated with the material wealth aspect of home ownership—but material wealth may not increase happiness as much as you thought. According to a study from Princeton University’s Woodrow Wilson School, money can buy happiness up to a point—and that point is about $75,000: “The lower a person’s annual income falls below that benchmark, the unhappier he or she feels. But no matter how much more than $75,000 people make, they don’t report any greater degree of happiness.”
That means that your new home’s stability and equity, along with its correlation with success, may not actually make you any happier—especially if you’re making a salary above $75,000 to pay for it.
Association With Other Variables
In some cases, buying a home is correlated with other variables that might have a positive influence on your happiness. For example, many people wait to buy a house until they have a spouse and/or a family to share it with; there’s evidence that spending time with family can make us happier, so in this case, home ownership could be correlated with higher happiness without actually causing it. Your ability to buy a house may also be a sign that you have control and ambition in your life overall, which can independently make you feel happier.
In other cases, buying a home will actually influence variables that make you less happy. Some research suggests that when saving to buy a home, you spend less money on vacations, going out to eat, and doing things with friends and family members, all of which will likely bring you more happiness than your real estate investment. In the words of Elizabeth Dunn, an associate professor of psychology and specialist in consumerism and happiness at the University of British Columbia, “People still view housing as a central component of happiness and a critical aspect of the American dream. But there is little research to support that.”
Will Owning a Home Make You Happier?
So will owning a home actually make you happier? That depends on many variables, including your own personality, and the circumstances under which you’re buying a home. There’s a good chance that buying a home can improve some elements of your life, but if you have to sacrifice other elements to get there, it may not be worth it.
Either way, don’t count on home ownership being
the one thing that can make or break your happiness; even though buying real
estate is a big and impactful investment, as far as your overall happiness is
concerned, your home pales in comparison to the other variables in your life.