The link between
financial security and homeownership is especially important today as inflation rises. But many people may not
realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of
Association of Realtors (NAR), says:
rewarding in so many ways and can serve as a vital component in achieving
just a few reasons why, if you're looking to increase your financial stability,
homeownership is a worthwhile goal.
Owning a Home Is a Building Block for Financial Success
A recent NAR report details several homeownership
trends and statistics, including the difference in net worth between homeowners
and renters. It finds:
. . .
the net worth of a homeowner was about $300,000 while that of
a renter's was $8,000 in 2021.
put that into perspective, the average homeowner's net worth is roughly 40
times that of a renter(see
The results from this
report show that owning a home is a key piece to the puzzle when building your
overall net worth.
Equity Gains Can Substantially Boost a Homeowner's Net Worth
The net worth gap
between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as
your home appreciates in value and you make your
mortgage payments each month.
other words, when you own your home, you have the benefit of your mortgage
payment acting as a contribution to a forced savings account. And when you
sell, any equity you've built up comes back to you. As a renter, you'll never see a return on the
money you pay out in rent every month.
Homeownership has always been an important way to
The gap between a
homeowner's net worth and a renter's shows how truly foundational homeownership
is to wealth-building. If you're ready to start on your journey to
homeownership, let's connect today. Contact me at (904) 274-1692 to get started.