"Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal."
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 the National Association of Realtors (NAR), says:
“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”
Here are 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.”
To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter (see visual below):
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.
In 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.
To sum it up, NAR says it simply:
“Homeownership has always been an important way to build wealth.”
Bottom Line
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.
To view original article, visit Keeping Current Matters.
Selling This Fall? You Want To Get These 4 Things Right.
Selling your house this fall is absolutely doable. Buyer activity typically starts to slow while the number of homes for sale climb – and you need the right strategy to get attention in this type of market.
Selling This Fall? You Haven’t Missed Your Window
Getting your house sold this season comes down to how well it’s priced and presented, and that’s where a local agent shines.
Thinking About Tapping into Your 401(k) To Buy a Home? Read This First.
No matter which route you take, talk with a financial expert first. The buyers who come out ahead build a solid plan with the right professionals before starting their journey to homeownership.
Most Home Sales Close – Here’s How To Keep Yours on Track
Some reasons are outside a seller’s control, like whether a buyer’s loan clears or whether they sell their own home in time. But there are a few proactive things you can do to help make sure your sale goes as smoothly as possible.
Selling a Luxury House? Here’s Why Now Is a Good Time
High-end buyers tend to feel less of the affordability pressure weighing on many households today, so they keep buying even when the wider market slows.
More Homes, Better Prices: A Buyer’s Summer
Sellers are reading market conditions and are pricing accordingly from the start rather than listing high and cutting later, and buyers are taking note and making bids.