The Best Way to Build Wealth- Homeownership- Per The New York Times

Homeownership and Wealth Creation is an article The New York Times published recently. It’s great to read and see that the confidence level of both experts and consumers seems to be increasing, as the housing market continues to recover. 

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.”

Another relevant article and study is the Survey of Consumer Finances recently completed by the Federal Reserve. This article shares that the average net worth of a renter ($5,400) is 36x less than that of a homeowner ($194,500).

Upon reading the articles, it’s clear that a large catalyst of this discrepancy is the “forced savings” generated by the consistency of a mortgage payment. The Times explains:
“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.”

So, taking the above into consideration, it’s clear that homeownership is a fantastic way to build wealth- there really is no other similar solution. Get with a real estate professional who is familiar with your market and begin looking at all the pros of letting go of your lease and grabbing hold of a home purchase contract!