A Fannie Mae survey recently revealed some of the most valued benefits of homeownership, which continue to be key drivers in today’s powerful home. Here are the top four financial benefits of owning a home according to consumers surveyed:
- 88% – better chance of saving for retirement
- 87% – the best investment plan
- 85% – the chance to be better financially
- 85% – the opportunity to grow wealth
Additional financial benefits of homeownership included in the survey have the best overall tax situation and will be able to live up to your budget.
Does home ownership actually give you a better chance of building wealth?
No one can question a person’s unique feelings about the importance of home ownership. However, it is fair to ask whether the numbers justify home ownership as finance asset.
Last fall, the Federal Reserve released the Consumer Finance Survey, a report done every three years, with the latest edition covering up to 2019. Their results confirmed that homeownership is a clear financial advantage. The survey found that homeowners has forty times higher net worth than tenants ($ 255,000 for homeowners compared to $ 6,300 for tenants).
The difference in net worth between homeowners and tenants continued to grow. Here is a graph showing the results of the last four Fed surveys:The above graph only includes data up to 2019, but according to CoreLogic, la equality held by homeowners has grown by $ 26,300 in the last twelve months alone. This means that the difference between the net worth of homeowners and tenants has probably widened even more over the last year.
Some might argue that the difference in net worth may be due to homeowners who usually have higher incomes than tenants and therefore the ability to save more money. However, a study of First American shows that homeowners have a greater net worth than tenants regardless of their income level. Here are the findings:Others may think homeowners are older and therefore have greater net worth. However, a Joint Center for Housing Studies of Harvard University report about homeowners and tenants over the age of 65 reveals:
“The ability to build equity puts homeowners well ahead of tenants in terms of household wealth … the median owner aged 65 and over had a household equity of $ 143,500 and a net worth of $ 319,200. By comparison, the net worth of the same tenant was only $ 6,700. “
Homeowners 65 or older have 47.6 times the net worth of tenants.
The idea of home ownership as a direct way to build your net worth has stood the test of time. Let’s get connected if you’re willing to take steps to become a homeowner.
Content previously posted in Keep Current Things