Homeownership Is Full of Financial Benefits

<article class="post-2092 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2092"><span class="entry-date">April 8, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Homeownership Is Full of Financial Benefits</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Homeownership+Is+Full+of+Financial+Benefits&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhomeownership-is-full-of-financial-benefits%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Homeownership Is Full of Financial Benefits | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104129/20210408-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104129/20210408-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104129/20210408-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>A <em>Fannie Mae</em> <a href="https://www.fanniemae.com/media/38891/display">survey</a> recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today’s power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:<span id="more-44161"></span></p>
<ul>
<li>88% – a better chance of saving for retirement</li>
<li>87% – the best investment plan</li>
<li>85% – the chance to be better off financially</li>
<li>85% – the chance to build up wealth</li>
</ul>
<p>Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.</p>
<h4><strong>Does homeownership actually give you a better chance to build wealth?</strong></h4>
<p>No one can question a person’s unique feelings about the importance of homeownership. However, it’s fair to ask if the numbers justify homeownership as a <strong>financial</strong> asset.</p>
<p>Last fall, the <em>Federal Reserve</em> released the <a href="https://www.federalreserve.gov/publications/files/scf20.pdf">Survey of Consumer Finances</a>, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that <strong>homeowners</strong> <strong>have forty times higher net worth than renters</strong> ($255,000 for homeowners compared to $6,300 for renters).</p>
<p>The difference in net worth between homeowners and renters has continued to grow. Here’s a graph showing the results of the last four Fed surveys:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104133/20210408-MEM-Eng-1.png"><img alt="Homeownership Is Full of Financial Benefits | Simplifying The Market" class="aligncenter wp-image-44164" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104133/20210408-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104133/20210408-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104133/20210408-MEM-Eng-1-400×300.png 400w" width="650"/></a>The above graph only includes data through 2019, but according to <em>CoreLogic</em>, the <a href="https://www.corelogic.com/insights-download/homeowner-equity-report.aspx">equity</a> held by homeowners grew by $26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.</p>
<p>Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building">study</a> by <em>First American</em> shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:<a href="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104131/20210408-MEM-Eng-2.png"><img alt="Homeownership Is Full of Financial Benefits | Simplifying The Market" class="aligncenter wp-image-44163" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104131/20210408-MEM-Eng-2.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104131/20210408-MEM-Eng-2.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/04/07104131/20210408-MEM-Eng-2-400×300.png 400w" width="650"/></a>Others may think homeowners are older and that’s why they have a greater net worth. However, a <em>Joint Center for Housing Studies of</em> <em>Harvard University</em> <a href="https://www.jchs.harvard.edu/sites/default/files/reports/files/Harvard_JCHS_Housing_Americas_Older_Adults_2019.pdf">report</a> on homeowners and renters over the age of 65 reveals:</p>
<blockquote>
<p><em>“The ability to build equity puts homeowners far ahead of renters in terms of household wealth…the median owner age 65 and over had home equity of $143,500 and net wealth of $319,200. By comparison, the net wealth of the same-age renter was just $6,700.”</em></p>
</blockquote>
<p>Homeowners 65 and older have 47.6 times greater net worth than renters.</p>
<h3><strong>Bottom Line</strong></h3>
<p>The idea of homeownership as a direct way to build your net worth has met the test of time. Let’s connect if you’re ready to take steps toward becoming a homeowner.</p>
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