The Shocking Difference in Net Worth Between Home Owners & Renters

Minnesota First Time Home BuyersChances are that by now, you’re well-aware of all the advantages being a home owner provides, which of course range from enjoying a variety of tax breaks to locking in a monthly mortgage that goes a long way in stabilizing your finances.

But did you also know that the net worth of home owners is well over 44 times greater than that of a renter? That’s right—according to the Federal Reserve’s most recent Survey of Consumer Finances, the median net worth of home owners spiked 15% to $231,400 since the previous report was unveiled back in 2013, while the median net worth of renters actually dropped by 5% to just $5,200.

While it’s true that saving for a down payment and ultimately buying a home for the first time can be a huge hit to your savings, the upside is that simply paying your mortgage each and every month continues to increase the equity in your home, which almost acts as a default savings account.  

So while deducting mortgage interest and property taxes from your annual income and locking in a long-term monthly payment are certainly great reasons to make the transition from renting to owning, home ownership is also one of the best ways to build family wealth, which may just be the greatest advantage of all.

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