CGR Realty Group

CGR Realty Group

  • Buying
  • Selling
  • Locations
  • Lifestyle
  • Meet the Team
  • Reviews
  • Download KW APP
  • Contact
Advanced Search
Home Equity Analysis

Homeownership Is a Key to Building Wealth

November 10, 2020 by Christine Ruszkiewicz

Spread the love

Homeownership Is a Key to Building Wealth

Homeownership Is a Key to Building Wealth | MyKCM

For years, real estate has been considered the best investment you can make. A major reason for this is due to the net worth a household gains through homeownership. In fact, according to the 2019 Survey of Consumer Finance Data from the Federal Reserve, for the average homeowner:

“…a primary home accounts for 90% of the total wealth of a family in the U.S.”

How do homeowners gain wealth?

Most large purchases, like cars and appliances, depreciate in value as they age, so it’s understandable to question how owning a home can increase wealth over time. In a simple equation, the National Association of Realtors (NAR) explains how the combination of paying your mortgage and home price appreciation grow overall wealth:

Principal Payments + Price Appreciation Gains = Housing Wealth Gain

As home values increase and you make payments toward your home loan, you’ll gain wealth through equity. The same article from NAR also addresses how wealth gains tend to play out over time:

“Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation. And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,000.”

Taking a look at how equity has grown for the typical homeowner, it’s clear to see how real estate is a sound long-term investment. NAR notes:

“Nationally, a person who purchased a typical home 30 years ago would have typically gained about $283,000 as of the second quarter of 2020.” (See graph below):

Homeownership Is a Key to Building Wealth | MyKCM

Bottom Line

Whether you’re a current homeowner planning to put your equity toward a new home or have hopes of buying your first home soon, homeownership will always be a great opportunity to build your net worth and overall wealth. Owning a home is truly an investment in your financial future.

Summary
Homeownership Is a Key to Building Wealth
Article Name
Homeownership Is a Key to Building Wealth
Description
For years, real estate has been considered the best investment you can make. A major reason for this is due to the net worth a household gains through homeownership. In fact, according to the 2019 Survey of Consumer Finance Data from the Federal Reserve, for the average homeowner.
Author
CGR Realty Group
Publisher Name
CGRRealtyGroup.com
Publisher Logo
CGRRealtyGroup.com

Filed Under: Featured

Recent Posts

  • Homeownership Is a Key to Building Wealth
  • Things to Do in Franklin, WI
  • The Basics of a Home Mortgage
  • Things to Consider When Pricing Your Home
  • 6 Steps to Selling a Home

Categories

  • Buying
  • Featured
  • Lifestyle
  • Selling

Search Tools

  • Basic Search
  • Advanced Search
  • Map Search
  • Address Search
  • MLS Number
  • Home Valuation

Click Image to Download KW App

Account Tools

  • My Account
  • Signup
  • Login

CGR Realty Group
2665 S Moorland Rd. Suite 104
New Berlin, WI 53151

Cell: 414-403-1726
Email: chrisrusk@kw.com

  • Facebook
  • LinkedIn

Another BREW by Ballen Brands