A Strong Case for Homeownership

Katherine Martin • June 16, 2017

Housing affordability questions have placed homeownership and public policy near the top of the national agenda, as mortgage brokers know. Most of the commentary has been focused on the extent to which government policy, particularly with regards to supply, is contributing to the affordability challenges. This debate is ongoing and will not be resolved here.

But there is less basic commentary about why we should care about homeownership. Why should government policy support homeownership? Simply put: it remains a powerful conveyor belt to the middle class.

Home ownership is associated with a raft of economic and social benefits including better educational and health outcomes, stronger families, safer communities, higher levels of civic participation and greater wealth accumulation. A few policy areas are more likely to generate upward mobility and economic opportunity than housing and home ownership.

Here are some highlights from a considerable body of research:

  • Kulkarni and Malmendier (2015) analyze the link between homeownership and upward mobility, and find a strong positive relationship for the children of homeowners that the two economists attribute to the stability and social capital that is associated with owning one’s home.
  • A post-recession update to past research on the broad economic and social benefits of homeownership by Rohe and Lindblad (2013) concludes that “there is considerable evidence that positive homeownership experiences result in greater participation in social and political activities, improved psychological health, positive assessments of neighborhood, and high school and post-secondary school completion.”
  • Ni and Decker (2009) study the relationship between homeownership and crime and find not only that “homeownership itself has a strong and statistically significant negative effect on both violent and property crime rates,” but that increases in homeownership rates reduce criminal activity over time.
  • Haurin et al. (2002) study the link between homeownership and educational performance for children and find that it leads to a 13 percent to 23 percent improvement in a higher-quality home environment, greater cognitive ability and fewer child behaviour problems relative to renting.
  • Harkness and Newman (2003) examine whether children from lower-income and higher-income families benefit equally from homeownership and find that for children growing up in families with incomes less than 150 percent of the federal poverty line, homeownership raises educational attainment, earnings and welfare independence in young adulthood.

These studies show the direct and spillover benefits that can come from a pro-homeownership society. Limited research has tested these findings in the Canadian context. Yet the work that has been done finds similar experiences and results.

A 2013 CMHC survey of nearly 1000 Canadians who purchased a home through Habitat for Humanity casts light on the significant benefits that come with homeownership. Respondents showed positive results across a range of economic and social indicators, including labour force attachment, the educational performance and behaviour of their children, improved personal finances, better health, and general happiness. Most respondents identified that these benefits derived “from the security, stability and sense of control that comes with homeownership” (2).

A 2012 study commissioned by Habitat for Humanity Toronto found similar results in its assessment of the “social impact” of homeownership. The findings are powerful: 95 percent of respondents said that their families were stronger, 81 percent reported an improvement in their child’s social life, 76 percent reported improvement in their children’s grades, 72 percent reported strong community and neighbourhood ties, and 50 percent reported that they felt safer.

As for wealth accumulation, housing has been a major driver of overall household net worth in Canada. A 2015 report by TD Economics finds that it represents about one-third of the roughly $6.6-trillion increase since 1990. The importance of housing wealth has even increased as an overall share of household net worth and accounted for 40 percent of the total increase in net worth since 2001 (TD Economics 2015).

While a number of factors contribute to upward mobility and middle-class opportunity including education, family and culture, homeownership plays a strong role in Canada and elsewhere. This is a critical point: the evidence shows that the benefits are not just limited to homeowners. Society benefits when families have access to affordable, responsible homeownership and thus government policy should continue to support it.

 

The article “The Case of Homeownership” was originally published on the Canadian Mortgage Trends, a publication of Mortgage Professionals Canada. 

Katherine Martin


Origin Mortgages

Phone: 1-604-454-0843
Email: kmartin@planmymortgage.ca
Fax: 1-604-454-0842


RECENT POSTS

Mortgages Aren’t One-Size-Fits-All

By Katherine Martin • December 17, 2025
Why the Cheapest Mortgage Isn’t Always the Smartest Move Some things are fine to buy on the cheap. Generic cereal? Sure. Basic airline seat? No problem. A car with roll-down windows? If it gets you where you're going, great. But when it comes to choosing a mortgage? That’s not the time to cut corners. A “no-frills” mortgage might sound appealing with its rock-bottom interest rate, but what’s stripped away to get you that rate can end up costing you far more in the long run. These mortgages often come with severe limitations—restrictions that could hit your wallet hard if life throws you a curveball. Let’s break it down. A typical no-frills mortgage might offer a slightly lower interest rate—maybe 0.10% to 0.20% less. That could save you a few hundred dollars over a few years. But that small upfront saving comes at the cost of flexibility: Breaking your mortgage early? Expect a massive penalty. Want to make extra payments? Often not allowed—or severely restricted. Need to move and take your mortgage with you? Not likely. Thinking about refinancing? Good luck doing that without a financial hit. Most people don’t plan on breaking their mortgage early—but roughly two-thirds of Canadians do, often due to job changes, separations, relocations, or expanding families. That’s why flexibility matters. So why do lenders even offer no-frills mortgages? Because they know the stats. And they know many borrowers chase the lowest rate without asking what’s behind it. Some banks count on that. Their job is to maximize profits. Ours? To help you make an informed, strategic choice. As independent mortgage professionals, we work for you—not a single lender. That means we can compare multiple products from various financial institutions to find the one that actually suits your goals and protects your long-term financial health. Bottom line: Don’t let a shiny low rate distract you from what really matters. A mortgage should fit your life—not the other way around. Have questions? Want to look at your options? I’d be happy to help. Let’s chat.

Bank of Canada Rate Announcement Dec 10th, 2025

By Katherine Martin • December 10, 2025
Bank of Canada maintains policy rate at 2.1/4%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario December 10, 2025 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank’s October Monetary Policy Report (MPR). Canada’s economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility. Canada’s labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued. CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year’s GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is January 28, 2026. The Bank’s next MPR will be released at the same time.
© 2025 

Katherine Martin. All Rights Reserved.