Homeownership is a Key to Accumulating Wealth

With inflation on the rise, the link between financial stability and homeownership is more vital than ever. However, many individuals are unaware of how much owning a property adds to your entire net worth. As President of the National Association of Realtors (NAR) Leslie Rouda Smith puts it:

“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability.”

Here are a few reasons why homeownership is a worthy objective if you want to improve your financial stability.

Having a Home is a Necessary Component of Financial Success.

Several homeownership trends and statistics, including the gap in net worth between homeowners and renters, are detailed in a recent NAR report. It discovers:

“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”

In comparison, the average homeowner's net worth is nearly 40 times that of a renter (see graph below):

A Key To Building Wealth Is Homeownership | Simplifying The Market

The findings of this study suggest that owning a property is an important component of increasing your overall net worth.

Gains in Equity can Significantly Increase a Homeowner's Net Worth.

The difference in net worth between homeowners and renters is mostly due to the fact that homeowners accumulate equity. As a homeowner, your equity builds as the value of your property rises and you make your monthly mortgage payments.

To put it another way, when you buy a home, your mortgage payment serves as a contribution to a forced savings account. And any equity you've built up is returned to you when you sell. You will never see a return on the money you pay in rent each month as a tenant.

To sum it up, NAR says it simply:

“Homeownership has always been an important way to build wealth.”


The disparity between a homeowner's and a renter's net worth demonstrates how important homeownership is to wealth accumulation. Let's connect today if you're ready to take the first step toward homeownership.

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