As a result of the Great Recession and the fall of the housing market, homeownership became an unattractive means of expanding a person’s financial assets. Furthermore, mortgages became too expensive for average- to low-wage earners and renting became the only possible option for housing.
However, according to data published in September 2014 by the Federal Reserve’s Survey of Consumer Finances (SCF), if growing your wealth is a priority for you, homeownership should be on top of your list of investments. Here’s why.
The Federal Reserve Survey of Consumer Finances, a survey done every three years, gathers information on the different financial states of families in various socioeconomic groups. Their findings show that families who own their house have a much higher net worth than those who are renting. The difference between the two is astoundingly high. In 2013, homeowners’ net worth was more than thirty-six times greater than renters. In 2013, the net worth of homeowners was $195,400 while the net worth of renters was only $5,400. In addition, the National Association of Realtors (NAR) predicts that in 2015 the net worth of homeowners will continue to increase to as much as $223,200 while the net worth for renters will increase by only a $100.
What does this mean? The majority of homeowners got the bulk of their net worth from owning a residential property. One of the reasons why their net worth continues to increase as time goes on is because of home appreciation. Over time, houses accumulate more value than what they were originally purchased for. This makes a home a great investment venture. Furthermore, declining mortgage balances is also a key aspect of this rise in net worth. As a mortgage continues to be paid off, net worth concurrently increases.
In fact, Storey Realty can help you out! We will be your Salt Lake City Realtor and partner in finding a home that can find a home that will have the highest probability of adding value to your wealth in the years to come. Contact me about finding you a great home today.