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The Difference in Net Worth Between Homeowners and Renters is Widening

Tuesday, August 24, 2021   /   by Doug Leugers

The Difference in Net Worth Between Homeowners and Renters is Widening


The Difference in Net Worth Between Homeowners and Renters Is Widening | MyKCM



Becoming financially secure is an important goal for many people today, but some don’t realize just how much homeownership can help them achieve that dream. A recent report, The Journey Toward Financial Freedom, surveys Americans about their perspective on financial wellness and their goals. It shows there may be a significant misconception about the role owning a home plays in building wealth:



“Home ownership is one of the indicators Americans say is least connected to financial health."


Two major personal wealth goals – homeownership and net worth – work hand-in-hand. Below are just a few reasons why, if you’re looking for financial security, homeownership should be a top priority.


Homeownership Is an Important Cornerstone of Building Wealth


Every three years, the Federal Reserve releases the Survey of Consumer Finances which highlights the difference in wealth between homeowners and renters. The graph below shows the findings across the previous surveys including the latest data (2019), and the results are staggering:The Difference in Net Worth Between Homeowners and Renters Is Widening | MyKCMAs the graph illustrates, the gap between homeowners and renters continues to widen. That’s because homeownership contributes massively to an individual’s overall net worth. Odeta Kushi, Deputy Chief Economist at First Americanhighlights this idea:



“. . . between 2016 and 2019, housing wealth was the single biggest contributor to the increase in net worth across all income groups . . . .”


When we look even closer at the most recent data from 2019, the average homeowner’s net worth is more than 40 times greater than that of the average renter (see graph below):The Difference in Net Worth Between Homeowners and Renters Is Widening | MyKCMThe gap exists in large part because homeowners build equity as their home appreciates in value and they pay off a portion of their mortgage each month. When you own your home, your monthly mortgage payment is, in essence, forced savings that come back to you when you sell your home or refinance. As a renter, you’ll never see a return on the money you pay out in rent every month.


If you’re ready to start building your net worth, the current real estate market offers several opportunities you should consider. For example, with today’s low mortgage rates, your purchasing power may be higher now than it has been in some time. That means there may be no better time than now to start working towards your homeownership goals – especially since rates are anticipated to rise in the coming months.


Bottom Line


Owning a home provides one of the strongest foundations for building individual wealth and lasting financial security. If you’re ready to start your path towards homeownership, let’s connect today.

Leugers Group
Doug & Lona Leugers
5039 Ocean Blvd
Siesta Key, FL 34242
239-398-3131
Brokered By EXP Realty
Part of the Team Freedom Network

Principal Broker: Andrew Shock

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Ā© 2021 My Florida Regional MLS DBA Stellar MLS, Inc.. All rights reserved. The data relating to real estate displayed on this website comes in part from the Internet Data Exchange (IDX) Program of My Florida Regional MLS DBA Stellar MLS, Inc. All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independently verified. Listing information is provided for consumers' personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law.9/26/2021 12:56 AM CST
The source of this real property information is the copyrighted and proprietary database compilation of the Southwest Florida MLS organizations Copyright 2021. Southwest Florida MLS organizations. All rights reserved. The accuracy of this information is not warranted or guaranteed. This information should be independently verified if any person intends to engage in a transaction in reliance upon it. The property information herein is derived from various sources that may include, but not be limited to, county records and the Multiple Listing Service and it may include approximations. Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification.
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