Economic Benefits of Asset Building: Is Homeownership the Best Strategy for Rural Low-Income Households?

Abstract

This study uses data from action research among low- to moderate-income individuals in a rural Mississippi county to assess the economic benefits of building assets through homeownership. The study assesses various financial practices among homeowners and renters such as savings and borrowing behavior as well as money management. The results indicate that being an owner, compared to a renter, may lead to better saving and borrowing behavior. However, both groups responded somewhat similarly regarding general savings, some debt (for example, payday loans and consumer credit), and money management (for example, knowing what percent of income is spent on specific expenses). The findings imply that promoting homeownership as a viable means for asset building among this sample should be done cautiously and that programmatic efforts for asset building may benefit from including small business development and/or educational attainment.