There are many financial benefits to homeownership, but probably none more important than its ability to create family wealth.
How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is an online resource for research and information on how homeownership contributes to individual and community success.
Their article, The First Rung on the Ladder to Economic Opportunity Is Housing, explains the importance of homeownership to a family’s financial health. In that article, they simply stated:
“The ladder to economic success can stretch only so high without the asset-building power of homeownership.”
To this point, National Association of Realtors’ (NAR) Economists’ Outlook Blog revealed in a recent post:
“Housing wealth contributes positively to the homeowner’s and children’s economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further increases the home value), a child’s college education, emergency or major life events, or expenses in retirement…
Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan.”
Here is a graph showing the build-up of wealth over time:Just last month, NAR’s Chief Economist, Lawrence Yun, explained that even though home appreciation has slowed, homeowners are still building wealth:
“Homeowners in the majority of markets are continuing to enjoy price gains, albeit at a slower rate of growth. A typical homeowner accumulated $9,500 in wealth over the past year.”
Later in life, this wealth is crucial…
This wealth is important to a family’s retirement plans. In a recent report from the Joint Center for Housing Studies at Harvard University titled, Housing America’s Older Adults 2018, they revealed that a renter 65 years old or older has a net worth of $6,710. Meanwhile, a homeowner 65+ years old has a net worth of $319,200. That huge difference will allow for a dramatic upgrade in one’s lifestyle during your retirement years.
Homeownership builds wealth. This, in turn, allows families to have more and better options when it comes to their children and their life in retirement.
Start Your Home Search:
Are you ready to start searching for your next home? It’s a great time, we have more inventory than we did the past few years. I encourage you to explore homes currently on the market to get a feel for the types of homes, locations, and price points. My Denver real estate blog has loads of useful information for home buyers trying to figure out what they want to do. And of course, please call me, or send me an email / text, to discuss your next home and the buying process.
Also, if you are considering new construction, remember the builder’s real estate agent represents the builder’s interest, not your’s. There is no cost for you to have a buyer’s agent represent you. In fact, I may be able to help you save money and negotiate for extras which the builder may not let you know about.
Considering Selling Your Home?
If you are looking to sell your home in the Denver area, I encourage you to work with a real estate agent who has the experience and knowledge to provide an accurate market comparison so you can determine the right asking price. The market is more balanced now and your asking price is an important component of your selling strategy. Contact me today to learn how your home stacks up against the competition and how we can position your property to sell quickly and for a fair price.