Study: Homeownership benefits children

WASHINGTON – Oct. 25, 2012 – Three California professors conducted a study on how homeownership benefits of children. Working under the Research Institute for Housing America, an independent arm of the Mortgage Bankers Association, they found that the homeowners’ children stay in school longer and face a lower risk of teen pregnancy than renters’ children.

The study did not offer a reason why homeownership helps children, but one author has an opinion:

“Does buying a home make you a better person?” asks Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “No, but the discipline associated with saving for even a small downpayment and subsequently managing a house is, on average, associated with the discipline needed to promote better outcomes for children.”

To focus on the value of homeownership, the study attempted to back other influences out of the equation, such as the education level of parents or their marital status, income, race and age. Their goal was to look specifically at homeownership’s influence on a child’s development.

Major findings

• Children who live in owner-occupied homes have higher graduation rates. The dropout rate was 2.6 percent lower than renters’ children.

• The teen birth rate for homeowners’ children was 5 percent less than renters.

• The length of homeownership seemed unimportant. Some critics suggested that it wasn’t homeownership per se that influenced children, but instead, the length of time a family lives in a neighborhood. However, the study suggests that even relatively recent homebuyers’ kids had the same benefits as long-time owners.

• The size of the parent’s home downpayment made little difference, even if it was relatively low. All children benefited when their parents owned the home. However, the authors noted one exception: Parents who bought a home with no downpayment saw no advantage.

• For both renters and homeowners, a parent’s education level was a strong predictor of their child’s success.

• Buying a home has the strongest benefit for children 12 to 17 years old. While a home purchase helps younger children, the study found that it had the greatest benefit around the teen years.