Recently, many homeowners have questioned whether owning a home is the best way to build their wealth. The answer may differ from person to person, but generally the answer remains that it is a great way to build wealth. What are the facts and what makes us say that homeownership continues to be a way to build on your net worth?
A recent study by the Federal Reserve sheds some light on this subject. This is what we know.
- Over the four year period between 2007-10, the “median income had also fallen slightly in the preceding three-year period.” Federal Reserve
- Average American families have a net worth of $77,300
- 61.4% of the above mentioned net worth is in home equity
- Renters have 30 times less net worth than homeowner’s
It’s true that over the past five years, home ownership has lost its appeal as a viable financial investment, and many are singing the praises of renting over owning a home. We have to ask ourselves, though, if we can gauge the future by the past five years.
In fact, we can’t. Zillow has been reporting positive figures in home values. Home sales are pointing in the same direction. And what is the end result of the Federal Reserve’s study? Home ownership continues to be a worthwhile way to increase your net worth and live the American Dream.
Are you considering the possibilities of building wealth through home ownership? Let’s set aside some time to discuss your options.