Homeowner Net Worth Surges Significantly
Contemplating whether to rent or purchase a home? A crucial piece of data from the Federal Reserve Board’s triennial Survey of Consumer Finances (SCF) might aid your decision-making process. This report highlights the stark wealth disparity between homeowners and renters, revealing a substantial difference.
Homeowners, on average, possess a net worth nearly 40 times that of renters. The evidence is clear in the accompanying graph that homeowner net worth has surged significantly in recent years.
Why Homeowners’ Net Worth Has Surged Signifacantly
The latest SCF report shows a significant increase in homeowners’ net worth compared to renters. Previously, the average homeowner’s net worth was about $255,000, while a renter’s was $6,300. The recent report indicates an even wider gap, with homeowners’ wealth seeing an unprecedented surge. The SCF notes:
“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”
A primary factor behind this surge is the increase in home equity.
During the recent ‘unicorn’ years in the housing market, home prices skyrocketed due to a shortage of available homes and a surge in buyers, spurred by historically low mortgage rates. This supply-demand imbalance drove prices up, significantly boosting homeowners’ equity.
If you’re debating between renting and buying, you might wonder if you’ve missed out on this wealth increase. However, it’s important to understand that home ownership remains a viable path to growing your net worth. As The Ascent recently pointed out:
“Whether your net worth increased in recent years or not, there are steps you can take to boost that number in the coming years. . . buying a home can be a great way to grow your net worth, since home values have a tendency to rise over time.”
Despite current mortgage rates hovering around 7-8%, home prices continue to rise in many regions due to ongoing supply shortages. Experts predict continued property value appreciation, albeit at a more typical rate.
Buying a home now can still lead to equity growth in the coming years. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), emphasizes:
“. . . when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data . . . the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.”
Bottom Line
If you’re undecided about renting or buying, consider the significant long-term net worth benefits of homeownership. For more insights into homeownership advantages, connect with Countryside Homes NJ and RE/MAX Select, and let’s explore your options.
Client Testimonials for Countryside Homes NJ
At Countryside Homes NJ and RE/MAX Select, we pride ourselves on delivering exceptional service to our clients. But don’t just take our word for it—read what our satisfied customers have to say. From first-time homebuyers to seasoned real estate investors and new home builders, our clients appreciate our dedication, expertise, and commitment to their success. Here are some of their stories.
Collaborating with Keith LaBrunda and Heather Montalbano from Countryside Homes NJ and RE/MAX Select streamlined the home-buying process for me. They were attentive to my needs and preferences, ensuring they understood exactly what I was seeking in a home and what was within my financial comfort zone. Keith and Heather provided invaluable assistance during the offer stage, sharing insightful details that enabled me to place a successful bid on my desired property. They recommended associates to assist me with securing a mortgage, conducting home inspections, and acquiring homeowner's insurance. Post-purchase, they continued to be a resource, suggesting local companies to contact for internet, water, waste management, oil, and other essential services. The experience of purchasing a home with Keith LaBrunda and Heather Montalbano was seamless and enjoyable.
As first-time homebuyers, the process of finding and purchasing a home felt daunting. But from the moment we reached out to Heather and Keith at Countryside Homes NJ and RE/MAX Select, our worries were put to rest. Their team was incredibly patient, answering all our questions and guiding us through every step. They took the time to understand our needs and preferences, ensuring that we found the perfect home in a neighborhood we love. We were especially impressed by their vast knowledge of the local market and their commitment to ensuring we got the best deal possible. We can't thank them enough for making our dream of homeownership a reality. If you're in the market for a new home, we highly recommend Heather and Keith at Countryside Homes NJ and RE/MAX Select. They truly go above and beyond for their clients!
From the moment we began our home search, Heather at Countryside Homes NJ and RE/MAX Select stood out as the epitome of professionalism and dedication. Her team's in-depth knowledge of the Rockaway Borough area and their unwavering commitment to our needs made our home buying journey not only smooth but truly enjoyable. As new homeowners in Rockaway Borough, NJ, we can confidently say that choosing Heather at Countryside Homes NJ and RE/MAX Select was the best decision we made. Her expertise, patience, and genuine care for our family's needs transformed what could have been a stressful process into a memorable and joyous occasion. We are beyond grateful for her support and would highly recommend her and her team to anyone looking to find their dream home. Thank you for turning our dreams into reality!
Contact a Real Estate Agent
Heather Montalbano
Real Estate Sales Associate
Cell: 973-796-4947
RE/MAX Select
Office: 973-625-0450
Keith LaBrunda
Real Estate Sales Associate
Cell: 973-476-4182
RE/MAX Select
Office: 973-625-0450
RE/MAX Select - Rockaway, NJ
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