It has long been known that home ownership increases personal wealth. Renting an apartment or house makes sense for some individuals but over the long haul you are much better off purchsing a home. You just cannot deny the facts.
In Worcester County Ma. there are numerous rental units to choose from but pricing for apartments has recently skyrocketed to dollar amounts previously seen only in the Boston market.
Over the past 7-10 years, the median-priced home in the U.S. gained about $150-200,000 in value. The average homeowner saw their personal wealth increase substantially. Renters missed that opportunity.
Low-income homeowners-built wealth at $100,000 while middle- and upper-income homeowners accumulated $125,000-150,000 in wealth respectively according to a report released Tuesday by the National Association of Realtors.
“Over a period of time, home ownership is a solid path towards building wealth,” says Lawrence Yum, chief economist for the National Association of Realtors, told USA Today. “It works in two ways: First you have the advantage of home price appreciation, and second, it forces homeowners to save for monthly mortgage payment which renters don’t have.” In the top 10 areas with the highest homeownership rates for the middle-income households, owners gained $110,000 in wealth on average in the past 10 yearts. In Ogden, Utah, for example, with 85% of the middle-income households owning their own home, homeowners have built nearly $220,000 in wealth in the past decade.
In the San Jose, California, metro area, low-income owners accumulated nearly $630,000 in the past 10 years, and middle-income owners gained $643,000. All of the top 10 areas with the largest wealth gains for low-income owners-surpassing $290,000-were in California.
Among all segments of income and race, the wealth gain was smaller over the past 15 years compared with the past 10 years, reflecting the loss of equity when people bought at the peak of the housing crisis in 2007.
In the areas with the highest home-ownership rates for low-income households, wealth gains were $140,000 on average. In Prescott, Arizona, where more than 2 out of 3 low-income households own their own home, owners have built more than $200,000 in wealth in the past decade. Barnstable Town, Massachusetts, as well as the Florida metro areas of North Port, Port St. Lucie, Palm Bay and Deltona, were other areas where most low-income households owned their home and accumulated a substantial amount of wealth – more than $120,000 – in the past decades.