Leave a Message

Thank you for your message. We will be in touch with you shortly.

A Key To Building Wealth Is Homeownership

Real Estate

A Key To Building Wealth Is Homeownership
The link between financial security and homeownership is especially important today as inflation rises.  But many people may not realize just how much owning a home contributes to your overall net worth. As Leslie Rouda Smith, President of the National Association of Realtors® (NAR), says:
 

“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”

Here are just a few reasons why, if you’re looking to increase your financial stability, homeownership is a worthwhile goal.
 

Owning a Home Is a Building Block for Financial Success

 
A recent NAR report details several homeownership trends and statistics, including the difference in net worth between homeowners and renters. It finds:
 
“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”
 
To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter (see visual below):
 
 
The results from this report show that owning a home is a key piece to the puzzle when building your overall net worth.
 

Equity Gains Can Substantially Boost a Homeowner’s Net Worth

 
The net worth gap between owners and renters exists in large part because homeowners build equity. As a homeowner, your equity grows as your home appreciates in value and you make your mortgage payments each month.
 
In other words, when you own your home, you have the benefit of your mortgage payment acting as a contribution to a forced savings account. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.
 
To sum it up, NAR says it simply:
 
“Homeownership has always been an important way to build wealth.”

Bottom Line

 
The gap between a homeowner’s net worth and a renter shows how truly foundational homeownership is to wealth-building. If you’re ready to start on your journey to homeownership, let’s connect today.

Recent Blog Posts

Stay up to date on the latest real estate trends.

Discover the 10 Best Trails in Mountain View California

Mountain View is a hub of technology, innovation, and natural beauty. While known for its bustling tech scene, it's also home to a network of scenic trails that provid… Read more
Discover the 9 Most Popular Places to Visit in Mountain View: Explore Local Attractions and Real Estate Opportunities

Mountain View, located in the heart of Silicon Valley, is known for its tech-driven innovation and its welcoming community. Beyond being the home of major companies li… Read more
Top 10 Best Restaurants in Mountain View 2024

Mountain View is not only home to some of the most innovative tech companies in the world but also to a fantastic array of dining options. Whether you are a foodie loo… Read more
Silicon Valley Newsletter - August 2024

Median home prices are slightly below peak levels across Silicon Valley. We expected price contraction after peaking in the second quarter, which is the seasonal norm.… Read more
Falling Mortgage Rates Are Bringing Buyers Back

After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors. And yester… Read more
Silicon Valley Newsletter - June 2024
View All

LET'S TALK

You’ve got questions and we can’t wait to answer them.

Contact Us
Get in Touch
Contact Details

Illuminate Properties

(650) 520-7675

[email protected]



228 Hamilton Ave #300

Palo Alto, CA 94301