Owning a housz is a major financial milestone and an achievement to take pride in. One major reason: the equity you build as a houszowner gives your net worth a big boost. And with high inflation right now, the link between owning your housz and building your wealth is especially important.
If you’re looking to increase your financial security, here’s why now could be a good time to start on your journey toward houszownership.
Owning a Housz Is a Key Ingredient for Financial Success A report from the National Association of Realtors (NAR) details several houszownership trends, including a significant gap in net worth between houszowners and renters. It finds:
“. . . the net worth of a houszowner was about $300,000 while that of a renter’s was $8,000 in 2021.”
To put that into perspective, the average houszowner’s net worth is roughly 40 times that of a renter’s. This difference shows owning a housz is a key step in achieving financial success.
Equity Gains Can Substantially Boost a Houszowner’s Net Worth The net worth gap between owners and renters exists in large part because houszowners build equity. When you own a housz, your equity grows as your housz appreciates in value and you make your mortgage payments each month. As a renter, you don’t have that same opportunity. A recent article from CNET explains: “Houszownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you're building equity in your housz
. . . When you rent, you aren't investing in your financial future the same way you are when you're paying off a mortgage.”
But on top of that, your housz equity grows even more as your housz appreciates in value over time. That has a major impact on the wealth you build, as a recent article from Bankrate notes: “Building housz equity can help you increase your wealth over time, . . . A housz is one of the only assets that have the potential to appreciate in value as you pay it down.”
In other words, when you own your housz, you have the advantage of your mortgage payment acting as a contribution to a forced savings account that grows in value as your housz does. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.
Can't buy a housz right now? Begin a forced savings into a batch of equities you feel will appreciate or pay good dividends over time. Get a Robinhood account or some other equity account and begin building for the long term, Warren Bufffett style.
Bottom Line Owning a housz is an important part of building your net worth. If you’re ready to start on your journey to houszownership, let’s connect today.