These Home Owners Have 48 Times More Money Than Renters

By
Real Estate Agent with Fairfax Realty

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data covers responses from 2013-2016.

The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

There are many who see that statistic and point toward how broad the range of respondents are for the Federal Reserve survey. Their study includes all economic and social groups and also includes all age groups. The argument is that older respondents have a higher likelihood of being homeowners, while the homeownership rate among younger survey takers is much lower.

Recently, the Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater!

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Homeowners Aged 65+ Have 48x More Net Worth Than Renters | Simplifying The Market


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Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36. Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.

It is no surprise that lifelong-renters have had a hard time accruing net worth as the latest Census report shows that the Median Asking Rent has been climbing consistently over the last 30 years.

Homeowners Aged 65+ Have 48x More Net Worth Than Renters | Simplifying The Market

Bottom Line

As a homeowner you put your monthly mortgage payment to work for you, building your net worth with every payment.

Comments (3)

Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Dave,

This is really interesting. Houses are a sort of forced saving plan that is hedged against inflation. Good to buy, if you can at your current life stage. Your future self will thank you.

Dec 05, 2018 09:43 AM
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

Second time I have seen similar data with a similar conclusion on this site.  I think there may be a trend here.  

Dec 05, 2018 11:46 AM
Sharon Kolb
Atlanta Decatur Homes - Atlanta, GA
Broker - Atlanta Decatur Homes

Unfortunately, in the Atlanta area, many first time buyers are forced out of the market due to lack of affordable close-in properties.  Great post!

Dec 05, 2018 03:04 PM