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Want to Build Wealth? Buy a Home This Year.

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Real Estate Agent with HomeSmart 0561240

Want to Build Wealth? Buy a Home This Year.

Every year, households across the country make the decision to rent for another year or take the leap into homeownership. They look at their earnings and savings and then decide what makes the most financial sense. That equation will most likely take into consideration monthly housing costs, tax advantages, and other incremental expenses. Using these measurements, recent studies show that its still more affordable to own than rent in most of the country.

There is, however, another financial advantage to owning a home that's often forgotten in the analysis the wealth built through equity when you own a home.

Odeta Kushi, Deputy Chief Economist for First American, discusses this point in a recent blog post. She explains:

Once you include the equity benefit of price appreciation, owning made more financial sense than renting in 48 out of the 50 top markets, with the only exceptions being San Francisco and San Jose, Calif.

What has this equity piece meant to homeowners in the past?

ATTOM Data Solutions, the curator of one of the nations premier property databases, just analyzed the typical home-price gain owners nationwide enjoyed when they sold their homes. Here's a breakdown of their findings:Want to Build Wealth? Buy a Home This Year. | Simplifying The MarketThe typical gain in the sale of the home (equity) has increased significantly over the last five years.

CoreLogic, another property data curator, also weighed in on the subject. According to their latest Homeowner Equity Insights Report, the average homeowner gained $17,000 in equity in just the last year alone.

What does the future look like for homeowners when it comes to equity?

Here are the seven major home price appreciation forecasts for 2021:Want to Build Wealth? Buy a Home This Year. | Simplifying The MarketThe National Association of Realtors (NAR) just reported that today, the median-priced home in the country sells for $309,800. If homes appreciate by 5% this year (the average of the forecasts), the homeowner will increase their wealth by $15,490 in 2021 through increased equity.

Bottom Line

As you make your plans for the coming year, be sure to consider the equity benefits of home price appreciation as you weigh the financial advantages of buying over renting. When you do, you may find this is the perfect time to jump into homeownership.

 

Posted by

e signature for Shayne Stone

“YOUR Rock-Solid Choice Realtor for Making Home Sellers a Profit & Home Buyers Equity”

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Comments (6)

Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, Shayne Stone buying a home is the quickest way to build wealth....and the longer you hold on to it, the more you'll make!! 

Feb 26, 2021 05:53 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful weekend!

Feb 26, 2021 06:16 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Shayne, excellent information for buyers on the fence wondering whether or not  buying a home is a good decision.

Feb 26, 2021 06:16 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Great message, Shayne... and one that I "push" all the time. Wishing you a lovely weekend ahead.

Feb 26, 2021 08:36 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Shayne and you are so right, Buyr A HOME NOW!  It is the time now with the low interest rates.

 

Feb 26, 2021 10:57 AM
Winston Rowe & Associates CRE Investing Financing
Winston Rowe & Associates - Saint Clair Shores, MI
No Upfront Fee Commercial Loans

Shayne, a duplex is a great first to build wealth. Great article.

Feb 26, 2021 06:24 PM