There is good news for home owners out there and for anyone looking to build future wealth. A survey conducted by the Federal Reserve, revealed that the 2016 median net worth of homeowners was $231,400 - a whopping 15% increase since 2013!
One of the factors related to this large increase, is the home equity that home owners have experienced over recent years. While home ownership is down slightly overall to 63.7% from 69% in 2004, those who own a home have experienced an increase in housing values reducing mortgage debt to value.
Simply stated, owning a home is a great way to build family wealth.
For the last four years, Gallup has reported that Americans picked real estate as the best long-term investment. Home ownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home. This includes investment properties which accrue equity over time with low overhead given the skyrocketing rental market.
Speaking of renting, the Federal Reserve also noted that the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013). So not only are renters, not investing their money to work for them, but they are reducing their net value overall.
These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.
Read the report here: Survey of Consumer Finances
Greater equity in your home gives you options.
If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle or want to discover if owning a home fits in your budget, please contact us and I will connect you with a great lender, no obligations.