Are you caught in the endless dilemma of choosing between renting and diving into homeownership? We’ve uncovered a game-changing nugget of wisdom from the 2023 Survey of Consumer Finances (SCF) dropped by the Federal Reserve Board. Brace yourselves for this spoiler: homeowners’ net worth is nearly 40 times that of renters.
Let’s dive into the riches homeowners are reaping. In the previous report, homeowners flaunted an average net worth of around $255,000, while renters chilled at a modest $6,300. Fast forward to the latest release, and voila! Homeowners’ net worth has skyrocketed, marking the largest three-year jump ever recorded in SCF history.
Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), sums it up perfectly:
“… when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit… “
So, what’s the secret sauce? Home equity, my friends! Remember the ‘unicorn’ years for housing? Crazy demand, scarce homes, record-low mortgage rates – it was a wild ride. Home prices soared as everyone clamored for a piece of the homeownership pie. If you owned a home during that time, your equity probably did a happy dance.
Sure, mortgage rates have nudged up a bit, hovering around 7-8%. But guess what? Prices are still on the rise in many areas due to the unrelenting demand. While it might not be the crazy spike of recent years, buying now can still grow your equity down the road.
So, if you’re itching to buy and have the means to do so, it’s not just a house you’re getting – it’s an investment that could beef up your net worth in the long run.
Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), sums it up perfectly:
“… when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data … the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.”
In a nutshell, if you’re wavering between renting and owning, remember that homeownership can significantly boost your net worth over time.
Reach out to us today to kickstart the process or complete the contact form on this page. We’re excited to be part of your journey to homeownership!
