Owning Your Home Helps You Build Wealth

You may have heard some people say it’s better to rent than buy a home right now. But, even today, there are lots of good reasons to become a homeowner. One of them is that owning a home is typically viewed as a good long-term investment that helps your net worth grow over time. Homeownership Builds Wealth Regardless of Income Level You may be surprised to learn homeowners across various income levels have a much higher net worth than renters who make the same amount. Data from _First American_ helps illustrate this point (_see graph below_): [](https://i0.wp.com/www.simplifyingthemarket.com/content/images/20230718/20230720-Homeowners-Build-Wealth-Across-Incomes.png?ssl=1) What makes wealth so much higher for homeowners? A recent article from _Realtor.com_ [says](https://www.realtor.com/advice/finance/everyones-talking-about-home-equity-heres-what-yours-means-in-todays-market/): > _“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month,_ **_owning a home allows you to build home equity_**_. And over time, equity can turn your mortgage debt into a sizeable asset.”_ Basically, the wealth you accumulate when you own a home has a lot to do with equity. As a homeowner, equity is built up as you pay down your loan and as home prices appreciate over time. Mark Fleming, Chief Economist at _First American,_ [explains](https://blog.firstam.com/economics/the-reconomy-podcast-why-it-matters-that-millennials-have-closed-the-homeownership-gap) how this same benefit isn’t true for renters in a recent podcast: > _“Renters as non-homeowners gain no wealth benefit as home prices rise. That wealth actually accrues to the landlord.”_ Before you decide to sign another rental agreement, now is a good time to think about whether it would be better for you to buy a home instead. The best way to figure out what makes sense for you is to have a conversation with a real estate expert you trust. That professional can talk you through the benefits that come with owning to determine if that’s the right next step for you. ### Bottom Line If you’re not sure whether to keep renting or to buy a home, know that owning a home, no matter how much money you make, can help build your wealth. Connect with a local real estate agent to get started on the path to homeownership. Posted in [Buying Myths](https://cherylbowerrealestate.com/category/buying-myths/), [First Time Home Buyers](https://cherylbowerrealestate.com/category/first-time-home-buyers/), [For Buyers](https://cherylbowerrealestate.com/category/for-buyers/), [Rent vs. Buy](https://cherylbowerrealestate.com/category/rent-vs-buy/)