Increasing Gap in Family Wealth


A Homeowner’s Net Worth is 45x Greater Than a Renter’s

Every 3 years, the Federal Reserve conducts a Survey of Consumer Finances in which data is collected across all economic and social groups. The most recent survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter.  In other words, $194,500 vs. $5,400!

In a Forbes article the National Association of Realtors’ (NAR) Chief Economist Lawrence Yun forecasts in 2016 the net worth gap will widen even further to 45 times greater.

The graph below illustrates the results of the last two Federal Reserve studies and Yun’s prediction:


Put Your Housing Cost to Work For You

Simply put, homeownership is a form of forced savings. Every time you make a mortgage payment, you are contributing to 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 reveals that 85% of consumers believe purchasing a home is a good financial decision.

Yun comments:

“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 learning if you could put your housing cost to work for you by purchasing a home, let’s talk so I can answer questions and guide you through the process.

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