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Owning Your Home Helps You Build Wealth

By
Real Estate Agent with eXp Realty LLC Salina Group BR00224198

 




You may have heard some people say it’s better to rent than buy a home right now. But, even today, there are lots of good reasons to become a homeowner. One of them is that owning a home is typically viewed as a good long-term investment that helps your net worth grow over time.

Homeownership Builds Wealth Regardless of Income Level

You may be surprised to learn homeowners across various income levels have a much higher net worth than renters who make the same amount. Data from First American helps illustrate this point (see graph below):

What makes wealth so much higher for homeowners? A recent article from Realtor.com says:

“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”

Basically, the wealth you accumulate when you own a home has a lot to do with equity. As a homeowner, equity is built up as you pay down your loan and as home prices appreciate over time. Mark Fleming, Chief Economist at First American, explains how this same benefit isn’t true for renters in a recent podcast:

“Renters as non-homeowners gain no wealth benefit as home prices rise. That wealth actually accrues to the landlord.”

Before you decide to sign another rental agreement, now is a good time to think about whether it would be better for you to buy a home instead. The best way to figure out what makes sense for you is to have a conversation with a real estate expert you trust. That professional can talk you through the benefits that come with owning to determine if that’s the right next step for you. 

Bottom Line

If you're not sure whether to keep renting or to buy a home, know that owning a home, no matter how much money you make, can help build your wealth. Let's connect now to get started on the path to homeownership.

Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Charles not only does it build wealth, but it gives you peace of mind, that your rent is not going to increase and that no one will tell you what color you want to paint your home inside:)Endre

Jul 22, 2023 11:00 PM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Good morning Charles. Inflation and equity build the piggy bank called home ownership. The rest of the benefit has been covered by Endre Barath, Jr.. Enjoy your day. 

Jul 23, 2023 05:28 AM
George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Charles Ross - (785)-819-6944 this is very true, especially over the last few years where home values went through the roof

Jul 23, 2023 03:44 PM
Steffy Hristova
HomeSmart Elite Group Tempe AZ Tel: 602.710.8161 - Tempe, AZ
Tempe AZ Realtor - Your Home Close to Your Work!

Charles,

The table showing how much more net worth home-owners have compared to renters is a great illustration. Great advice.

Jul 26, 2023 05:21 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your day!

Jul 26, 2023 06:45 AM