One of the best ways to build your family’s financial future is through homeownership. Recent data from the Federal Reserve indicates the net worth of a homeowner is in fact more than 40 times greater than that of a tenant. Maybe it’s time to start thinking about buying a home, especially when they’re like that affordable in today’s market.
Every three years the Consumer Finance Survey shows the deterioration of how home ownership helps build financial security. In the chart below, we see that the average net worth of homeowners continues to grow, while the net worth of tenants tends to remain fairly stable and be significantly lower than that of homeowners. The gap between ownership and rent only widens over time, making home ownership more and more desirable for those who are ready.
Owning a home is a great way to build family wealth.
For many families, home ownership serves as a form of “forced savings.” Every time you pay off your mortgage, you contribute to your net worth by increasing the equality you have in your home (See diagram below):The impact of domestic equality is part of why Gallup reports that Americans have chosen real estate as the best long-term investment for the seventh year in a row. According to this year’s survey, 35% of Americans chose real estate over stocks, savings accounts, gold and bonds.
Today there are great opportunities for those who are planning to buy a home. La housing market fully recovered, and always lowered interest rates gives homebuyers a big boost in purchasing power. If you’re ready, buying a home this fall can set you up to increase your net worth and create a safe net for your family’s future.
To learn how you can use your monthly housing cost to build your family’s net worth, let’s connect so you have a reliable professional to guide you through the home buying process.
Content previously posted in Keep Current Things