Experts Agree: Homeownership Provides a Path to Long-Term Wealth

Monday, October 11, 2021   /   by Janelle Endres

Experts Agree: Homeownership Provides a Path to Long-Term Wealth

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A new overview from LendingTree.com found there are numerous justifications for why Americans would decide to buy a home as opposed to leasing. Probably the most well known non-monetary reasons given include:



    • The flexibility to make the space your own

    • The pride homeownership offers

    • The sense of stability


In the same survey, 41% of respondents say they’d rather own a home than rent because of the unique way homeownership builds wealth over time.


And experts agree – the home you own is an important tool for building your net worth. Here’s what many of those experts have to say about building long-term financial stability through homeownership.


According to the National Association of Realtors (NAR):



“Homeowners who purchased a typical single-family existing-home 30 years ago at the median sales price of $103,333 with a 10% down payment loan and who sold the property at the median sales price of $357,700 in 2021 Q2 accumulated housing wealth of $349,258, . . .


Mark Fleming, Chief Economist at First American, points out that a home is truly a one-of-a-kind asset. It’s the only asset that’s both an investment and a place for you to call your own.



“The major financial advantage of homeownership is the accumulation of equity in the form of house price appreciation. . . . We won’t always have 17% house price appreciation, but we have to take into account the fact that the shelter that you're owning is an equity-generating or wealth-generating asset.


Homeowners can leverage the wealth they generate in several ways throughout their life. Tapping into accumulated equity has long been used to pay for the cost of an education, to start a business, or to fund various other expenses. The Joint Center of Housing Studies at Harvard points out:



“. . . by paying down mortgage principal each month and participating in the long-term appreciation of home values, a family can build wealth that can be used for retirement or other needs, including helping the next generation.


Bottom Line


With home costs expected to keep on appreciating in coming years, homebuyers have a chance to begin the drawn out abundance building measure at the present time. How about we associate today in case you're prepared to start your excursion on the way to turning into a property holder.


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