Here are the facts. The latest Federal Reserve consumer finances survey revealed the median net worth of a homeowner is $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 wealth of a homeowner is over 44 times greater than that of a renter. Owning a home is and always has been a great way to build family wealth.
Simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net wealth by increasing the equity, which is value, in your home. If you pay $200,000 for a home and its value increases to $250,000, you have earned $50,000 in wealth.
That is why, for the fifth year in a row, the Gallup poll reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds. Having equity in your home gives you financial options renters do not have.
Visit us at hfamiami.com/homebuyers to learn about our first-time home buyers mortgage, low interest rates and down payment assistance program.
Note, information in this blog derived from Keeping Current Matters.