Building wealth

Not everyone on a budget wants to rent an apartment. When I talk with people working in Chapel Hill about why they don’t live in town, most of the time they cite lack of affordability first. A surprising number then say, “There’s nothing to buy.”      

Cue up the public service announcements for Community Home Trust and Habitat for Humanity. Both nonprofits offer homes for sale at below-market rates. Both limit the amount of profit the homeowner can command when it comes time to resell, but homeowners still get back the equity they’ve put into the house with every mortgage payment. That money can provide the down payment on a market-rate home to lower the amount of the mortgage on the next place the homeowner buys.

Homeownership builds wealth, which is different from getting rich. A mortgage is like a forced savings account that you get to live in. And when you’re ready to move on, you put that return on your investment in your pocket.      

Both CHT and Habitat not only offer an entry into homeownership within people’s budgets, but both offer much nicer homes than the market-rate equivalent. People can live in better quality housing, within their budget while investing in a tangible asset.

Win, win, win.