Every three years, the Federal Reserve conducts aSurvey of Consumer Financesin which they collect data across all economic and social groups. The latest survey, which includes data from 2010-2013, reports that a homeowners net worth is 36 times greater than that of a renter ($194,500 vs. $5,400).
In aForbesarticle, theNational Association of Realtors (NAR) Chief EconomistLawrence Yun predicts that by the end of 2016, the net worth gap will widen even further to 45 times greater.
The graph below demonstrates the results of the last twoFederal Reservestudies and Yuns prediction:
Put Your Housing Cost to Work for You
As weve saidbefore, simply put, homeownership is a form of forced savings. Every time you pay your mortgage, you are contributing to your net worth. Every time you pay your rent, you are contributing to your landlords net worth.
ThelatestNational Housing Pulse SurveyfromNARreveals that 85% of consumers believe that purchasing a home is a good financial decision. Yun comments:
Though there will always be discussion about whether to buy or rent, or whether the stock market offers a bigger return than real estate, the reality is that homeowners steadily build wealth. The simplest math shouldnt be overlooked.
If you are interested in finding out if you could put your housing cost to work for you by purchasing a home, lets get together and evaluate your ability to buy today!