How To Grow Your Net Worth With Homeownership
Take a moment to imagine where you want to be a few years from now. Are you imagining that you will have a better job or more wealth? In your vision, are you wanting more financial stability while reaching your goals? If so, then you may want to consider homeownership, as owning a home comes with a whole lot of financial benefits.
Start Building Your Wealth
There are many reasons why buying a home is a great investment, and building wealth while gaining financial stability is one of the main ones. The average value of most homes increases over time, which in turn grows your net worth. According to Zillow, here is how home values are changing in today’s market:
“The total value of the U.S. housing market – the sum of Zillow’s estimated value for every U.S. home – is now slightly less than $52 trillion, which is $1.1 trillion higher than the previous peak reached last June.”
As you can see, homeownership is a tremendous tool for building wealth. Plus, with home values on the rise, now is a great time to consider buying a home.
The Household Net Worth Is Rising
It may be obvious that those in the top 1% saw the most dramatic net worth increase, but data shows that people from every single tax bracket have also seen their wealth grow over the past few years.
For many of those people, the rising value of home prices plays a big part in those numbers.
Owning A Home Helps You Achieve Financial Success
“...homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
The reason for this is that homeowners build equity. A home’s equity is the value of the home minus the amount owned on the loan. For most homeowners, that is the largest contributor to their overall net worth. Data from First American further expands on this fact.
The blue portion of each bar represents housing as a portion of net worth versus the orange for all other investments. For every income level, the housing portion of net worth dominates the total net worth. This means that stocks, gold, cryptocurrencies, and other investments only add up to a small portion of one’s net worth.
While homeownership comes with a wide range of benefits, the impact it has on your net worth is one of the most major ones. Reach out to award-winning realtor Dianne Anderson today to discover how you can grow your net worth in Southwest Florida.