When you buy a home, you are not only achieving a great financial milestone but also building your net worth. The equity you build when you own a home will increase your net worth.
The National Association of Realtors (NAR) reported that the net worth of a homeowner in 2021 was around $300,000 while a renter’s net worth was only $8,000. So basically a homeowner’s net worth is 40 times a renter’s net worth.
“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home . . . When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage,” CNET explains.
“Building home equity can help you increase your wealth over time, . . . A home is one of the only assets that have the potential to appreciate in value as you pay it down,” says Bankrate.
Your mortgage payment has an advantage over a rental payment. A renter will never see a return on their money. When you sell your home, you will see your money back plus some. Owning a home is an important part of building your net worth. If you’re ready to start on your journey to homeownership, connect with a trusted real estate advisor today.
