Key Points:
- A primary home accounts for 90% of the total wealth of a family in the United States.
- Because real estate typically increases in value over time, owning a home is considered one of the soundest investments you can make.
- If you’re a first-time buyer, homeownership will always be a great opportunity to build your net worth and overall wealth.
- Already own a home? Get in touch with our team to see how much it’s increased in value!
Owning a Home Can Build Your Net Worth and Wealth Over Time
Homeownership has always been a key pillar of the American Dream. However, it also comes with a host of financial benefits that can help you increase your wealth over time.
According to recent data from the Federal Reserve, a homeowner’s net worth is actually over 40 times greater than that of a renter. So if you’re looking to make a sound investment, you may want to consider buying a home. Let’s take a closer look at the numbers.
Real estate is a fantastic investment
Any investment comes with a certain amount of risk. If you really want to grow your portfolio, it’s best to go with something that offers low risk and high profitability. While this may seem difficult to achieve, homeownership is one of the few investments that offers both.
Once you buy your first home, you’ll immediately start building equity. And the longer you stay in the same place, the more you’ll earn over time.
How do homeowners gain wealth?
Most large purchases, like cars and appliances, depreciate in value as they age, so it’s understandable to question how owning a home can increase wealth over time. As home values increase and you make payments toward your mortgage, you’ll gain wealth through equity.
Even though home prices can fluctuate, they almost always trend upward over time. For example, in September 2020, the median sales price of existing home sales was $311,800. This is a 35% gain since July 2006, when prices peaked at $230,000 before the market collapse.
The longer you stay in your home, the more equity you build. According to a long-term study by the National Association of Realtors, someone who purchased an average home 30 years ago has gained about $283,000 in wealth over time. However, you don’t have to stay in your home for decades to see results. In the same study, homeowners who have lived in the same house for five years have already earned $81,994 of equity!
There’s never been a better time to buy
Are you ready to start building equity? If so, you’re in luck—there’s never been a better time to buy a home in Pittsburgh! Record low mortgage rates and increased affordability have helped many prospective buyers finally make a move. And if you’re looking for an agent, our team would love to help you navigate every step of the process.
Only Work with the Best
If you’re ready to start the next chapter in your real estate journey, just get in touch with the Jim Dolanch Team! We’d be happy to help you track down the perfect home, make an offer, and represent you at the negotiating table.
Want to see how much equity you’ve earned over time? Check out our fast and free home valuation to see where you stand.