For years, real estate has been considered the best investment you can do. A major reason for this is due to the worthless household earned by homeownership. In fact, according to the 2019 Consumer Financial Data Survey the la Federal Reserve, for the average homeowner:
“… a main home occupies 90% of the total wealth of a family in the United States”
How do homeowners gain wealth?
Most purchases, such as cars and appliances, depreciate in value as they age, so it is understandable to question how owning a home can be. increases wealth over time. In a simple equation, the National Association of Real Estate Agents (POMEGRANATE) explains how the combination of paying your mortgage and home price is appreciated to increase overall wealth:
Main Payments + Price-Appreciate Gains = Residential Wealth Gain
As home values grow and you pay off your home loan, you will gain wealth equality. The same NAR article also discusses how rich earnings usually evolve over time:
“Housing wealth accumulation requires time and grows by paying off mortgage debt and price. And while home prices may fall, House prices tend to recover and rise in the longer term. In September 2020, the average retail price of existing home sales was $ 311,800, a 35% gain since July 2006 when prices peaked at $ 230,000. “
Looking at how equity has grown for the typical homeowner, it is clear to see how real estate is a healthy long-term investment. NAR notes:
“Nation, a person who bought a typical home 30 years ago would normally earn about $ 283,000 by the second quarter of 2020. “(See graph below):
Are you a current homeowner planning to put your own equality to a new home or hope to buy your first home soon, home ownership will always be a great opportunity to build your net worth and overall wealth. Owning a home is really an investment in your financial future.
Content previously posted in Keep Current Things