Despite the changes to the tax laws, home ownership is still a great vehicle to accumulating wealth. Consider the following:
Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. The latest survey data covers 2013-2016.
According to the most recent study, on average, a homeowner's net worth is 44 times greater than that of a renter. The average net worth of a standard homeowner is $231,400 (up 15% since 2013) while a renter has an average net worth of only $5,200 (down 5% since 2013).
The report also claims that on average just over 60% of a consumer's net worth comes from their equity in a home.
Owning a home is a great way to build family wealth
Homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.
That is why, for the fourth year in a row, a Gallup poll reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, and bonds.
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The Scott Loper Team
Scott & Lisa Loper