Did you catch what our headline said? It bears repeating: A homeowner’s net worth in 2016 will be 45 times greater than a renter’s net worth:
Every three years the Federal Reserve conducts a Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowner’s net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In a recent Forbesarticle the National Association of Realtors’ (NAR)Chief Economist Lawrence Yun predicts that in 2016 the net worth gap will widen even further to 45 times greater.
The graph below demonstrates the results of the last two Federal Reserve studies and Yun’s prediction:
Put Your Housing Cost to Work For You
Simply put, homeownership is a form of ‘forced savings’. Every time you pay your mortgage you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlord’s net worth.
The latest National Housing Pulse Survey from NAR reveals that 80% of consumers believe that purchasing a home is a good financial decision. Yun comments:
“Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldn’t be overlooked.
Would you like to see if buying is a good option for you, using our tool called the Total Cost/Savings Analysis? Wouldn’t you love to increase your wealth? Give Josh Mettle a call at 801-747-1210 or [email protected] to request your complimentary Total Cost/Savings Analysis or to start the process of buying your home.
To read more about the ever increasing advantages of owning vs. renting, please read our first post: Rent crisis – what does it mean for you? And be sure and check out the second article, Need another reason to buy your own home? as well as this one The news is not good for renters.
Thanks to KCM blog for this post.