Renting vs. Buying: The Wealth-Building Difference You Need to Know

Deciding whether to rent or buy a home? According to the the Keeping Current Matter,  one of the most important factors to consider is how homeownership can significantly boost your net worth. Every three years, the Federal Reserve Board releases its Survey of Consumer Finances (SCF), which sheds light on the wealth gap between homeowners and renters. The results are eye-opening. On average, homeowners have nearly 40 times the net worth of renters. This difference is more than just a statistic – it’s a wealth-building opportunity that you shouldn’t overlook.

Why Homeowners Build More Wealth
In the latest SCF report, the average homeowner’s net worth is substantially higher than that of renters. Homeowners saw their wealth grow dramatically due to rising home equity. Equity is the difference between what your home is worth and what you owe on your mortgage. As home prices increase and you pay down your mortgage, your equity – and wealth – grow. In recent years, home prices have surged, driven by limited housing inventory and high demand. This imbalance has fueled fast-growing equity and, as a result, more wealth for homeowners.

The Housing Market Outlook: What You Need to Know
Although inventory has improved this year, the housing market is still facing shortages in many areas. Experts predict that home prices will continue to rise next year, though at a more moderate pace compared to the rapid increases seen during the pandemic. While the pace may not be as dramatic, there’s still potential for equity gains if you buy now. Homeownership remains one of the most powerful ways to build long-term wealth, even amidst market fluctuations.

Local Insights Can Make All the Difference
The housing market varies by location, so it’s essential to consult with a local real estate agent. They can provide valuable insights into local trends, helping you understand pricing and inventory in your area. More importantly, they’ll be able to guide you through the financial and lifestyle benefits of owning a home, making it easier to decide if now is the right time to buy.

Bottom Line: Own for Wealth, Rent for Flexibility
If you’re weighing the pros and cons of renting versus buying, remember this: homeownership offers a powerful path to growing your wealth over time. If buying a home feels out of reach, a local real estate agent and lender can help you explore financing options and programs that may make homeownership more achievable than you think. By taking the leap into homeownership, you’re not just securing a place to live – you’re investing in your future.

Ready to take the next step in your real estate journey? Whether you're buying, selling, or just exploring your options, Jason Buttorf is here to guide you with local expertise and personalized advice. Get in touch today to make informed, confident decisions in the ever-changing market.

source: www.keepingcurrentmatters.com