It has been well-reported recently that the median American household’s net worth has dropped 29 percent.
In an article by Jay Papasan of Keller Williams Realty International he makes the case that home ownership still makes sense. Even in the wake of the Great Recession the numbers still point to owning rather than renting.
There has always been a large gap between the wealth of homeowners versus renters. Even with the crash home-ownership still contributes greatly to household wealth. At the height of the market in 2007 the median homeowner’s net worth was approximately $246,000 while renter’s median net worth was $5400 – a wealth gap of more more than $240,000. After the housing market crashedrenter’s net worth dropped by only $300 and homeowners lost $71,500. However homeowners still realized approximately 35 times the net worth of renters.
Even with the 29 percent drop in wealth, homeowners still were on average $169,400 richer than the average U.S. renter.
If your job situation is good and finances in shape now is a great time to build wealth by buying your first home or adding to your wealth through investment real estate.
Statistics according to the June 2012 Federal Reserve Bulletin’s 2007-2010 Survey of Consumer
Finances: 2001 2004 2007 2010
Median Net Worth: Homeowner $211,500 $212,600 $246.000 $174,500
Median Net Worth: Renter $5,900 $4,600 $5,400 $5,100
The Real Estate Difference: $205,600 $208,000 $240,600 $169,400