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A Homeowner's Net Worth is 36x Greater than a Renter!

by Joanne Hiller

Homeowner's Net Worth is 36x Greater Than a Renter | Keeping Current Matters

Over the last six years, homeownership has lost some of its allure as a financial investment. As homeowners suffered through the housing bust, more and more began to question whether owning a home was truly a good way to build wealth.

The Federal Reserve conducts a Survey of Consumer Finances, every three years, and just released their latest edition this past week.

Some of the findings revealed in their report:

  • The average American family has a net worth of $81,200
  • Of that net worth, 61.4% ($49,856) of it is in home equity
  • A homeowner’s net worth is over 36 times greater than that of a renter
  • The average homeowner has a net worth of $194,500 while the average net worth of a renter is $5,400

Bottom Line

The Fed study found that homeownership is still a great way for a family to build wealth in America.

Buying a Home is 38% Less Expensive than Renting!

by Joanne Hiller

In Trulia’s 2014 Rent vs. Buy Report, they explained that home ownership remains cheaper than renting throughout the 100 largest metro areas in the United States; ranging from an average of 5% in Honolulu, all the way to 66% in Detroit, and 38% Nationwide!

The other interesting findings in the report include:

Even though prices increased sharply in many markets over the past year, low mortgage rates have kept home ownership from becoming more expensive than renting.

Some markets might tip in favor of renting later this year as prices continue to rise faster than rents and if – as most economists expect – mortgage rates rise, due both to the strengthening economy and Fed tapering.

Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989.

Bottom Line

Buying a home makes sense. Rental costs have historically increased at a higher rate of inflation. Lock in a mortgage payment now before home prices and mortgage rates rise as experts expect they will.

Displaying blog entries 1-2 of 2

Contact Information

Joanne Hiller
Coldwell Banker Residential Real Estate
110 Island Way
Clearwater FL 33767
(727)460-5721
Fax: (727)446-2691