Owning Your Home Helps You Build Wealth

<article class="post-747544 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-747544"><span class="entry-date">July 20, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Owning Your Home Helps You Build Wealth</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=Owning+Your+Home+Helps+You+Build+Wealth&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fowning-your-home-helps-you-build-wealth%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Owning Your Home Helps You Build Wealth Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230720-Owning-your-home-helps-you-build-wealth.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>You may have heard some people say it’s better to rent than <a href="https://www.simplifyingthemarket.com/2023/07/11/momentum-is-building-for-new-home-construction/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buy</a> a home right now. But, even today, there are lots of <a href="https://www.simplifyingthemarket.com/2023/06/02/reasons-to-own-your-home-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">good reasons</a> to become a homeowner. One of them is that owning a home is typically viewed as a good <a href="https://www.simplifyingthemarket.com/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">long-term investment</a> that helps your net worth <a href="https://www.simplifyingthemarket.com/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">grow</a> over time.</p>
<h4><strong>Homeownership Builds Wealth Regardless of Income Level</strong></h4>
<p>You may be surprised to learn homeowners across various income levels have a much higher net worth than renters who make the same amount. Data from <a href="https://blog.firstam.com/economics/homeownership-remains-strongly-linked-to-wealth-building" rel="noopener noreferrer" target="_blank"><em>First American</em></a> helps illustrate this point (<em>see graph below</em>):</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230718/20230720-Homeowners-Build-Wealth-Across-Incomes.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230718/20230720-Homeowners-Build-Wealth-Across-Incomes.png"/></a></p>
<p>What makes wealth so much higher for homeowners? A recent article from <em>Realtor.com</em> <a href="https://www.realtor.com/advice/finance/everyones-talking-about-home-equity-heres-what-yours-means-in-todays-market/" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, </em><strong><em>owning a home allows you to build home equity</em></strong><em>. And over time, equity can turn your mortgage debt into a sizeable asset.”</em></p></blockquote>
<p>Basically, the wealth you accumulate when you own a home has a lot to do with equity. As a homeowner, equity is built up as you pay down your loan and as home <a href="https://www.simplifyingthemarket.com/2023/06/27/why-homeownership-wins-in-the-long-run/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">prices appreciate</a> over time. Mark Fleming, Chief Economist at <em>First American,</em> <a href="https://blog.firstam.com/economics/the-reconomy-podcast-why-it-matters-that-millennials-have-closed-the-homeownership-gap" rel="noopener noreferrer" target="_blank">explains</a> how this same benefit isn’t true for renters in a recent podcast:</p>
<blockquote><p><em>“Renters as non-homeowners gain no wealth benefit as home prices rise. That wealth actually accrues to the landlord.”</em></p></blockquote>
<p>Before you <a href="https://www.simplifyingthemarket.com/2023/06/15/why-buying-or-selling-a-home-helps-the-economy-and-your-community/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">decide</a> to sign another rental agreement, now is a good time to <a href="https://www.simplifyingthemarket.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">think</a> about whether it would be better for you to <a href="https://www.simplifyingthemarket.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">buy a home</a> instead. The best way to figure out what makes sense for you is to have a conversation with a real estate expert you trust. That professional can talk you through the benefits that come with owning to determine if that’s the right next <a href="https://www.simplifyingthemarket.com/2023/06/22/what-homebuyers-need-to-know-about-credit-scores/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">step</a> for you. </p>
<h3>Bottom Line</h3>
<p>If you’re not sure whether to keep renting or to <a href="https://www.simplifyingthemarket.com/2023/07/04/americans-still-view-homeownership-as-the-american-dream/" rel="noopener noreferrer" target="_blank">buy a home</a>, know that owning a home, no matter how much money you make, can help build your wealth. Connect with a local real estate agent to get <a href="https://www.simplifyingthemarket.com/2023/06/19/saving-for-a-down-payment-heres-what-you-need-to-know/" rel="noopener noreferrer" target="_blank">started</a> on the path to homeownership.</p>
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