The link between financial security and homeownership is especially important as inflation rises. But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors (NAR) says, “Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”
Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal.
Owning a home is a building block for financial success
A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds: “. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”
To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter.
The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth.
Equity gains can substantially boost a homeowner’s net worth
The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month.
In other words, when you own your own home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent each month.
To sum it up, NAR says it simply, “Homeownership has always been an important way to build wealth.”
The gap between a homeowner’s net worth and a renter’s shows how truly foundational homeownership is to wealth-building. If you’re ready to start on your journey to homeownership, let’s connect today.
If you’re ready to buy a new home be sure to reach out to one of our Mortgage Bankers who can help you choose the programs that work best for you as well answer any questions that you may have.
Resource Financial Services exists to make people’s dreams of home ownership a reality. We offer experienced mortgage specialists who work hard to educate homebuyers about the wide variety of loan programs that can be tailored to meet individual financial needs. Homebuyers can expect quicker closings, same-day pre-approval, 5-Day Processing and guaranteed lower rates. Call toll-free at 877.797.4545 to speak with a mortgage banker or visit Resource Financial Services online at rfsmortgage.com to learn more.