More Signs That Homeownership Build Wealth

It is worth repeating the truism that owning a home is the best way to secure wealth. This is an easy statement to believe in retrospect but often put into doubt during times of rapid price appreciation when the stronger phrase in first time buyers’ mind tends to be, we don’t want to buy the last overpriced home. 

A recent Economic Insight article by Ksenia Potapov points out that the median priced homeowner has 38 times the household wealth of a renter. The gap is dramatic at every family income level. The bottom 20% bracket gap is more than $140,000 for a 97% disparity. Home equity in this bracket represents 84% of their wealth and continues to represent a large accumulation through the highest income bracket. More significantly, the control of housing expense homeownership provides frees up funds for investments that drives the dramatic wealth gap that grows larger in each bracket. The Fed’s triennial survey, Survey of Consumer Finances Potapov references shows the $140,000 wealth gap grows to $2 million at the highest income tier.

Good news from the study was the increase in homeownership in the lowest income bracket from the 2016 to 2019 survey.

Please give me a call at Premier Funding Network to answer any of your mortgage questions at 714-283-9900.