Owning a home has a significant impact on building your family's wealth. In fact, according to a recent study by Forbes, people who own their homes will have a net worth 45 times greater than those who rent. Just a few months ago, in June, during National Homeownership Month I wrote about how homeowners have a net worth that was 36 times greater than that of renters! The latest statistics shows that the gap between homeowners and renters is projected to be 45 times greater as 2016 rolls around.
The chart below clearly shows this increasing gap in wealth between homeowners and renters. And what is even more astounding is that renters are losing ground with a lower net worth projected for 2016 as compard with 2010 and 2013.
Another way to think of it is that homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth. But make no mistake about it... whether you rent or buy, you are paying a mortgage. The key questions are: which mortgage would you rather pay, yours or your landlord's? Whose net worth would you rather increase, yours or your landlord's?
No doubt that for many Americans, their home is one their most important financial assets providing long term net worth and wealth. Investing in your own home as a path to building your family's wealth is a great idea and a great reason to own your own home.
If you are a Charlotte metro are renter, who would like to make the transition from renter to homeowner to begin building your family's wealth, contact Carolinas Realty Partners. We can help you turn your rent payments into mortgage payments!
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