How Homeowners Use Their Home Equity Gains

September 7, 2016

You’re in business when you own your own house — sometimes literally.

The NAR’s Economists’ Outlook blog reports that, according to the February Survey of Consumer Expectations of the Federal Reserve Bank of New York, many respondents took advantage of a home equity loan or a line of credit and used the loan to improve their quality of life or economic standing.

Of those who did, respondents used the money for home improvement (50.5 percent), to help pay down other debts (46.6 percent), to pay for education (9.7 percent), to make a downpayment on a second home or investment property (6.3 percent), to make other financial investments (5.5 percent), or to invest in a business (1.7 percent).

The benefits of homeownership go beyond the financial aspects. In fact, according to the NAR’s 2015 Q4 HOME Survey, the primary reason for owning a property is less tied to it being a “financial investment” than as a “home” to raise a family in a stable environment. According to NAR’s survey, the primary reason pertains to “lifestyle considerations such as getting married, starting a family, or retiring” (35 percent of homebuyers). Another major reason is the “desire to settle down in one location” (18 percent of homebuyers).

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