{"id":9696,"date":"2024-01-11T06:30:00","date_gmt":"2024-01-11T11:30:00","guid":{"rendered":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=9696"},"modified":"2024-01-11T06:30:00","modified_gmt":"2024-01-11T11:30:00","slug":"the-dramatic-impact-of-homeownership-on-net-worth","status":"publish","type":"post","link":"https:\/\/blog.sfloridaluxuryhomes.com\/?p=9696","title":{"rendered":"The Dramatic Impact of Homeownership on Net Worth"},"content":{"rendered":"
\"The<\/p>\n

If you’re trying to decide whether to rent or buy a home<\/a> this year, here’s a powerful insight that could give you the clarity and confidence you need to make your decision.<\/p>\n

Every three years, the Federal Reserve<\/em> releases the Survey of Consumer Finances<\/a> (SCF), which compares net worth for homeowners and renters. The latest report shows the average homeowner\u2019s net worth is almost 40X greater than a renter\u2019s<\/strong> (see graph below<\/em>):<\/p>\n

<\/a><\/p>\n

<\/p>\n

One reason a wealth gap exists between renters and homeowners<\/a> is because when you\u2019re a homeowner, your equity<\/a> grows as your home appreciates in value and you make your mortgage payment each month. When you own a home, your monthly mortgage payment acts like a form of forced savings, which eventually pays off when you decide to sell. As a renter, you\u2019ll never see a financial return on the money you pay out in rent every month. Ksenia Potapov, Economist at First American<\/em>, explains<\/a> it like this:<\/p>\n

\u201cRenters don\u2019t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments . . .\u201d<\/em><\/p><\/blockquote>\n

The Largest Part of Most Homeowner Net Worth Is Their Equity<\/strong><\/h4>\n

Home equity<\/a> does more to build the average household\u2019s wealth than anything else. According to data from First American<\/em><\/a> <\/em>and <\/em>the <\/em>Federal Reserve<\/em><\/a>, this holds true across different income levels (see graph below<\/em>):<\/p>\n

<\/a><\/p>\n

<\/p>\n

The green segment in each bar represents how much of a homeowner’s net worth comes from their home equity. Based on this data, it’s clear no matter what your income level is, owning a home can really boost your wealth. Nicole Bachaud, Senior Economist at Zillow<\/em>, shares<\/a>:<\/p>\n

\u201cThe biggest asset most people are ever going to own is a home. Homeownership is really that financial key that helps unlock stability and wealth preservation across generations.\u201d<\/em><\/p><\/blockquote>\n

If you\u2019re ready to start building your net worth, the current real estate market offers several opportunities you should consider. For example, with mortgage rates<\/a> trending lower lately, your purchasing power<\/a> may be higher now than it has been in months. And, with more inventory<\/a> coming to the market, there are more options for you to consider. A local real estate agent<\/a> can walk you through the opportunities you have today and guide you through the process of finding your ideal home.<\/p>\n

Bottom Line<\/h3>\n

If you’re unsure about whether to rent or buy a home, keep in mind that owning a home can increase your overall wealth in the long run, no matter your income. To discover more about this and the many other benefits<\/a> of homeownership, connect with a local real estate agent.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\"The<\/p>\n

If you’re trying to decide whether to rent or buy a home this year, here’s a powerful insight that could give you the clarity and confidence you need to make your decision.<\/p>\n<\/div>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"bgseo_title":"","bgseo_description":"","bgseo_robots_index":"","bgseo_robots_follow":"","footnotes":""},"categories":[3,134,88,84,125],"tags":[],"class_list":["post-9696","post","type-post","status-publish","format-standard","hentry","category-blog","category-buying-myths","category-first-time-home-buyers","category-for-buyers","category-rent-vs-buy"],"_links":{"self":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/9696","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9696"}],"version-history":[{"count":0,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=\/wp\/v2\/posts\/9696\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9696"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9696"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.sfloridaluxuryhomes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9696"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}