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Washington, D.C. – Homeownership can be less costly than renting for low-income households and serve as an asset-building mechanism, even during times of economic upheaval, UNC Center for Community Capital researcher Sarah Riley today told economists and researchers convened for the Southern Economic Association annual meeting in Washington, D.C.

Riley, the center’s senior research economist, presented findings from an ongoing study, “The User Cost of Low-Income Homeownership,” conducted with graduate research assistant HongYu Ru.

The study examines whether owning a home is less costly than renting for individual low-income households who had purchased their homes with high-quality mortgage products. The user cost of owned housing is a comprehensive measure of all the financial costs and benefits associated with owning a house, such as mortgage interest and insurance, property taxes, home owners association fees, home maintenance, the opportunity cost of holding equity in the house and the amount of house price appreciation.

The center compared the user costs of low-income homeowners to the estimated costs of renting equivalent properties.  Researchers found that the median low-income homeowner was financially better off owning than renting during the period of 2003-2010, despite the foreclosure crisis. Moreover, an annualized house price appreciation rate of only 2 percent was all that was necessary to ensure that the median low-income homeowner found it no more costly to own than to rent.

Riley’s presentation is available online at

Mortgage finance is a key area of study for the UNC Center for Community Capital, the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. Part of the College of Arts and Sciences at the University of North Carolina at Chapel Hill, the center offers data and analysis that helps policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people more effectively. For more information, visit or call (919) 843-2140.

Topics(s): Affordable Homeownership, Mortgage Finance
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