Grow Wealth Through Homeownership

Homeowners have 44.5 times more net worth than renters

Owning your home is a great way to build wealth.  In fact, according to the National Association of Realtors, homeownership poses less financial risk than investing in the stock market. 

Further, for all families, “The value of the primary residence typically accounts for about ten times the median value of any financial asset.”

Homeownership will build wealth and security in a number of ways:

1.       Equity grows with each mortgage payment, unlike making a rent payment which benefits the landlord’s equity.

2.       It’s a way to hedge inflation.

3.       Tax deductions: mortgage interest and property taxes equal savings for homeowners.

4.       Appreciation over the long term.

5.       Fixed monthly payments.

6.       Privacy, control, and security as homeowners personalize their accommodations and make decisions about their properties.

7.   

Starter homes, too, are a great investment.  Consumers need not postpone their real estate purchase until they can afford their dream home.  A blog post at FreddieMac reveals modest properties that meet the basic needs of first-time homebuyers are a great way to build wealth to later invest in a forever home.

Some advantages of starter homes are better affordability; a way for buyers to grow an investment sooner versus later; and starter homes are long-term financial assets that could even be rented in the future if the owner’s finances allow.

Finally, per the Federal Reserve’s Survey of Consumer Finances, homeowners have 44.5 times more net worth than renters.  As of 2016, the median net worth for homeowners was $231,400, compared to $5,200 for renters.

Owning a home is one of the best ways to amass wealth over the long-term.   

Post authored by Lora Bray.

Check out our reviews on Google

You can find us here on Google.