How Owning a Home Builds Your Net Worth

<article class="post-444501 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-444501"><span class="entry-date">September 6, 2022</span><div class="entry-header center-block text-center"><h1 class="entry-title">How Owning a Home Builds Your Net Worth</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=How+Owning+a+Home+Builds+Your+Net+Worth&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fhow-owning-a-home-builds-your-net-worth%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="How Owning a Home Builds Your Net Worth | 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/2022/09/01094059/20220906-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2022/09/01094059/20220906-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2022/09/01094059/20220906-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p><a href="https://www.simplifyingthemarket.com/2022/08/15/the-u-s-homeownership-rate-is-growing/?a=712984-fa409495d5d70154d03a25e81e9540e2">Owning a home</a> is a major financial milestone and an achievement to take pride in. One major reason: the <a href="https://www.simplifyingthemarket.com/2022/07/06/how-your-equity-can-grow-over-time/?a=712984-fa409495d5d70154d03a25e81e9540e2">equity</a> you build as a homeowner gives your net worth a big boost. And with high <a href="https://www.simplifyingthemarket.com/2022/07/20/should-you-buy-a-home-with-inflation-this-high/?a=712984-fa409495d5d70154d03a25e81e9540e2">inflation</a> right now, the link between owning your home and building your wealth is especially important.<span id="more-47102"></span></p>
<p>If you’re looking to increase your financial security, here’s why now could be a good time to start on your journey toward <a href="https://www.simplifyingthemarket.com/2022/08/25/why-you-may-want-to-start-your-home-search-today/?a=712984-fa409495d5d70154d03a25e81e9540e2">homeownership</a>.</p>
<h4><strong>Owning a Home Is a Key Ingredient for Financial Success</strong></h4>
<p>A <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-report-02-23-2022_0.pdf">report</a> from the <em>National Association of Realtors </em>(NAR) details several homeownership trends, including a significant gap in net worth between homeowners and renters<em>. </em>It finds:</p>
<blockquote>
<p><em>“. . . the net worth of a homeowner was <strong>about $300,000 while that of a renter’s was $8,000 in 2021.”</strong></em></p>
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<p><strong>To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter’s</strong>. This difference shows owning a home is a key step in achieving financial success.</p>
<h4><strong>Equity Gains Can Substantially Boost a Homeowner’s Net Worth</strong></h4>
<p>The net worth gap between owners and renters exists in large part because homeowners build equity. When you own a home, your equity grows as your home <a href="https://www.simplifyingthemarket.com/2022/08/30/whats-actually-happening-with-home-prices-today/?a=712984-fa409495d5d70154d03a25e81e9540e2">appreciates in value</a> and you make your mortgage payments each month. As a <a href="https://www.simplifyingthemarket.com/2022/08/03/buying-a-home-may-make-more-financial-sense-than-renting-one/?a=712984-fa409495d5d70154d03a25e81e9540e2">renter</a>, you don’t have that same opportunity. A recent article from <em>CNET</em> <a href="https://www.cnet.com/personal-finance/mortgages/should-you-buy-a-home-in-2022-heres-what-you-need-to-know/">explains</a>:</p>
<blockquote>
<p><em>“<strong>Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home</strong> . . .</em> <em>When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage.”</em></p>
</blockquote>
<p>But on top of that, your home equity grows even more as your home <a href="https://www.simplifyingthemarket.com/2022/08/11/what-does-the-rest-of-the-year-hold-for-home-prices/?a=712984-fa409495d5d70154d03a25e81e9540e2">appreciates</a> in value over time. That has a major impact on the wealth you build, as a recent article from <em>Bankrate</em> <a href="https://www.bankrate.com/home-equity/how-to-build-equity-in-your-home/">notes</a>:</p>
<blockquote>
<p><em>“Building home equity can help you increase your wealth over time, . . . <strong>A home is one of the only assets that have the potential to appreciate in value as you pay it down</strong></em>.”</p>
</blockquote>
<p>In other words, when you own your home, you have the advantage of your mortgage payment acting as a contribution to a forced savings account that <a href="https://www.simplifyingthemarket.com/2022/07/25/whats-causing-ongoing-home-price-appreciation/?a=712984-fa409495d5d70154d03a25e81e9540e2">grows in value</a> as your home does. And when you sell, any <a href="https://www.simplifyingthemarket.com/2022/07/08/why-growing-home-equity-is-great-news-if-you-plan-to-move-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">equity</a> you’ve built up comes back to you. <strong>As a renter, you’ll never see a return on the money you pay out in rent every month.</strong></p>
<h3><strong>Bottom Line</strong></h3>
<p>Owning a home is an important part of building your net worth. If you’re ready to start on your journey to homeownership, let’s connect today.</p>
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