The New York Times recently published an editorial entitled, “Homeownership and Wealth Creation.” The housing market has made a strong recovery, not only in sales and prices, but also in the confidence of consumers and experts as an investment.
The article explains: “Homeownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth.”
The Federal Reserve conducted the Survey of Consumer Finances and found that the average net worthof a homeowner ($194,500) is 36x greater than that of a renter ($5,400).
“Homeownership requires potential buyers to save for a down payment, and forces them to continue to save by paying down a portion of the mortgage principal each month. Even in instances where renters have excess cash, saving a substantial amount is difficult without a near-term goal, like a down payment. It is also difficult to systematically invest each month in stocks, bonds or other assets without being compelled to do so.”
If you’re a renter who is considering making a purchase, call a Shorewest Agent today.
(This post was also shared by our friends at Keeping Current Matters.)
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Categories: Home Buying