Humans stand for freedom. Free choice enables us to create the life of our dreams. Financial stability is an important aspect of this freedom. We all want to pursue our goals and spend life independently post-retirement. The sooner you secure financial stability, the quicker you can turn your dreams into reality.
While there are many ways to achieve financial freedom, homeownership is the easiest way to build wealth.
Owning a home is a major financial milestone in everybody’s life and an achievement we all take pride in but why? Because the equity you build as a homeowner boosts your net worth in a big way. With inflation on the rise, the link between homeownership and wealth building is especially important.
So, here’s why starting your homeownership journey now can aid your goal of achieving financial security.
Owning a Home – The Key Ingredient to Financial Success
While both buying and renting a home can help you build your net worth, owning a home is more profitable.
According to a recent National Association of Realtors (NAR) report, “the net worth of a homeowner was about $300,000 while that of a renter was $8,000 in 2021.”To clarify this, the homeowner’s average net worth is nearly 40 times higher than that of a renter. The report further states that homeownership brings substantial social benefits for families, communities, and the country.
This is because homeownership is linked with better childhood educational performance, better health care outcomes, higher participation in civic and volunteer activities, and lower community crime rates. Homeownership is thus key to achieving financial success.
Equity Gains Can Substantially Boost a Homeowner’s Net Worth
Equity is the reason for the substantial wealth difference between renters and homeowners. Owning a home helps homeowners build equity. According to a recent CNET article from CNET ” Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home . . . When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage.”
Your equity grows when your home value appreciates. Further, homeowners, unlike renters, have the advantage of the mortgage payment contributing to a forced savings account that increases in value as the mortgage decreases.
CoreLogic, in its recently published Homeowner Equity Insights Report, showed continued growth in equity along with record home price appreciation. The report also revealed that the average homeowner gained approximately $51,500 in equity in the second quarter of 2021. The current realtor market offers a lot of scope for those planning to build their net worth by investing in residential property.
The Takeaway
Homeownership provides one of the strongest foundations for building wealth and lasting financial stability. So, if you have the courage and you’re ready to start your journey towards homeownership, get in touch with us – one of the most trusted real estate names in Florida today!
We have hundreds of residential properties listed on our website. Our real estate experts will assist you throughout your home-buying journey and help you get the best deal hassle-free. Contact us today!