How Homeownership Delivers Unsurpassed Family Wealth

Dated: 06/05/2019

Views: 21

How Homeownership Delivers Unsurpassed Family Wealth

How Homeownership Delivers Unsurpassed Family Wealth | MyKCM

There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth.

How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success.

Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family’s financial health. In that article, they simply stated:

“The ladder to economic success can stretch only so high without the asset-building power of homeownership.”

To this point, National Association of Realtors’ (NAR) Economists’ Outlook Blog revealed in a recent post:

“Housing wealth contributes positively to the homeowner’s and children’s economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further increases the home value), a child’s college education, emergency or major life events, or expenses in retirement…

Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan.”

Here is a graph showing the build-up of wealth over time:How Homeownership Delivers Unsurpassed Family Wealth | MyKCMJust last month, NAR’s Chief Economist, Lawrence Yun, explained that even though home appreciation has slowed, homeowners are still building wealth:

“Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year.”

Later in life, this wealth is crucial…

This wealth is important to a family’s retirement plans. In a recent report from the Joint Center for Housing Studies at Harvard University titled, Housing America’s Older Adults 2018, they revealed that a renter 65 years old or older has a net worth of $6,710. Meanwhile, a homeowner 65+ years old has a net worth of $319,200. That huge difference will allow for a dramatic upgrade in one’s lifestyle during your retirement years.

Bottom Line

Homeownership builds wealth. This, in turn, allows families to have more and better options when it comes to their children and their life in retirement.

Blog author image

Matthew Hoagland

My name is Matthew Hoagland, Team Leader of The Hoagland Real Estate Group of RE/MAX Premier Properties. I would like to thank you for considering our services in your search for a new home, listing y....

Latest Blog Posts

3 Things To Know In The Housing Market Today

3 Things to Know in the Housing Market Today!A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may

Read More

Louisville Open Houses June 14 16

#OPENHOUSELOUISVILLEHere is a list of all Open Houses from the MLS this weekend. Be Sure to consult with your Realtor if these homes are actually OPEN this weekend, or, CALL ME if you do not

Read More

Renting Or Owning What Is Better For You

Renting or Owning, What Is Better for You?In a real estate market where home prices are rising, many have begun to reexamine the idea of buying a home, choosing instead, to rent for a while. But

Read More

2 Myths Holding Back Home Buyers

2 Myths Holding Back Home BuyersFreddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.” Their research revealed, “

Read More