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How Owning a Home Builds Wealth
August 17, 2017 /Here’s something I wish I’d known in my early twenties: buying a home is one of the best ways to build wealth. In 2015, according to the Federal Reserve, the average homeowner’s net worth was $195,400, while the average renter’s net worth was $5,400. Perhaps you know all of this already and are wondering if buying a home is still, in the current economy, even after the 2008 housing crisis, one the best wealth-building strategies. The answer to this question is yes, and here are a few reasons why. 1. Owning a Home Builds Equity and Forces You to Save Home equity is an asset that comes from owning a home and represents one of the largest sources of net worth for most investors. In other words, equity is the portion of your home that you actually “own.” Of course, when you a buy a home you own all of it, but borrowing money to buy your property means that the seller still has an interest in it until you pay off the loan. Equity is essentially a form of wealth; you can eventually take out income or lump sum withdrawals from this asset, or you can pass it on…Read more
