Homeowner’s Net Worth v. Renters
Every 3 years, the Federal Reserve conducts a Survey of Consumer Finances where they collect data across all economic and social groups. The latest survey using data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
Lawrence Yun, the National Association of Realtors’ (NAR) Chief Economist, predicts by the end of this year the net worth gap will widen even further to 45 times greater.
The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s forecast:
Put Your Housing Cost to Work for You
As I’ve said before, one can look at home ownership as a form of ‘forced savings.’ With every mortgage payment you make, you are contributing toward your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.
The latest National Housing Pulse Survey from NAR shows 85% of consumers believe buying a home is a good financial decision.
According to Yun:
“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.”
Real Estate Bottom Line
If you are interested in putting your housing cost to work for you by buying a home, let’s get together and evaluate your ability to buy today! Give me a call me at 303-638-6536.