Home Ownership Can Help You Build Wealth

Hello Hampton Roads,

If you’ve been wanting to buy a home but haven’t quite pulled the trigger, consider that home ownership can help you build wealth.  Buying a home is usually the largest financial decision for most people and it can also be one of the most lucrative.  The 2019 Federal Reserve Survey of Consumer Finances, which comes out every 3 years, shows the relationship that home ownership has with net worth.  According to the study, homeowners have a net worth that is 40x greater than renters.  The median net worth for homeowners in the survey was $250,000 compared to $6,300 for renters and of the net worth for homeowners, almost half--$120,000 is from home equity!

Building home equity is the natural consequence of paying a mortgage; you don’t need to think about it as each payment you make automatically gives money back to you in the form of home equity.  If you’re renting a home, do you know how much of the rent payments you make go back to you? Zero.

In addition to building home equity, there is the added benefit of proprty value increase over time. Daniel Amerman wrote The Home Owner Wealth Formula where he found that nationally average home equity increased 4.1 times over a ten year period. Currently in Hampton Roads, housing prices are increasing due to a greater demand than supply—we have low inventory and low mortgage rates which increases affordability and adds fuel to the fire in terms of demand.  Something else to consider is the effect of inflation on home prices. Today’s economy has seen central banks add trillions to their balance sheets with the continued effect of devaluing the dollar.  This causes houses and other asset prices to rise.  A good way to preserve wealth is to put your dollars into assets that can appreciate in value—like real estate.

If you’d like to learn more about buying a home and see whether it right for you, I’m happy to talk with you: https://calendly.com/liz-schuyler

Thanks for Reading,

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View all Hampton Roads Homes for sale here:  https://www.hamptonroadsrealestate.us/