homeownership 40x net worth than renters

Owning a home makes your net worth 40x more than a renter

By: Ian Golightly MBA, Realtor


I enjoy the fact that I have the opportunity to find a place for clients that they call ‘home.’ But I also like to be practical and approach real estate as an opportunity for people to find personal wealth. The Federal Reserve conducts studies every few years by looking at the correlation of homeowners to renters. Their findings have indicated that homeowners net-worth are 40x more significant than a renter. If you are at a point you’re focusing on your net worth, maybe it’s time to consider buying a home if you are a renter, upgrading to something larger, or possibly investing in real estate. Either or, we can help you!


So, every three years, the Federal Reserve releases the Survey of Consumer Finances that shows a breakdown of how owning a home helps build financial security. You will see how a homeowner’s net worth continues to grow over time on the graph below. If you look at the bottom of the chart, you can see how the renter’s net worth is stagnant. The data shows a massive gap in owning a home that continues to widen, which makes homeownership more desirable if the time is appropriate.

Net Worth Gap Of Homeowners Vs Renters

Owning A Home Is The Best Strategy To Build Wealth (Net Worth):


For families who view homeownership as a financial asset, their perspective is that their home is a forced saving. When you pay your mortgage each month, you’re contributing to your net worth each time by increasing the equity in your home.


Net Worth Gap Of Homeowners Vs Renters


The most common question I hear is wondering when the best time to buy a home. That’s a tough question to answer because everyone situation is different. That’s why it’s best to set up a call. But no matter what, the housing market is not going to go anywhere. The environment may be different, which is why you should work with a professional who understands the real estate market and finance. If you’re ready, buying a home right now can put you in a position to increase your net worth to create a safety net for your family’s future.