A Fannie Mae survey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today’s power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:
Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.
No one can question a person’s unique feelings about the importance of homeownership. However, it’s fair to ask if the numbers justify homeownership as a financial asset.
Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that homeowners have forty times higher net worth than renters ($255,000 for homeowners compared to $6,300 for renters).
The difference in net worth between homeowners and renters has continued to grow. Here’s a graph showing the results of the last four Fed surveys:The above graph only includes data through 2019, but according to CoreLogic, the equity held by homeowners grew by $26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.
Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a study by First American shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:Others may think homeowners are older and that’s why they have a greater net worth. However, a Joint Center for Housing Studies of Harvard University report on homeowners and renters over the age of 65 reveals:
“The ability to build equity puts homeowners far ahead of renters in terms of household wealth…the median owner age 65 and over had home equity of $143,500 and net wealth of $319,200. By comparison, the net wealth of the same-age renter was just $6,700.”
Homeowners 65 and older have 47.6 times greater net worth than renters.
The idea of homeownership as a direct way to build your net worth has met the test of time. Let’s connect if you’re ready to take steps toward becoming a homeowner.
Stay up to date on the latest real estate trends.
Countless people have set out on the exciting journey of homeownership. Ask around and you’ll find the vast majority are thankful they took the leap and bought a home.… Read more
The median single-family home price rose 14% over the past three months. Condo prices have trended horizontally throughout 2023. Minor price changes are typical in the… Read more
The median single-family home and condo prices declined in the East Bay month over month. Year over year, prices in Alameda increased 2% for single-family homes and 1%… Read more
Looking forward, experts project home prices will continue to rise next year, but not quite as much as they did this year. Even though the expected rise in 2024 isn't … Read more
For more than 79 years, Veterans Affairs (VA) home loans have helped millions of veterans buy their own homes. If you or someone you care about has served in the milit… Read more
Are you dreaming of buying your own home and wondering about how you’ll save for a down payment? You're not alone. Some people think about tapping into their 401(k) sa… Read more
ADUs allow loved ones to live together while having separate spaces. That means you can enjoy each other’s company and help each other out with things like childcare, … Read more
Overall, median prices have trended horizontally over the past 12 months. Considering the rapidly rising interest rates, homes have maintained their value well. Active… Read more
Year over year, single-family home and condo prices were up across the East Bay. Contra Costa condo prices rose most significantly, up 18% since last September. We exp… Read more
You’ve got questions and we can’t wait to answer them.