Real Estate

What Is the #1 Financial Benefit of Homeownership? | Simplifying The Market

There are many financial and non-financial benefits of homeownership, and the greatest financial one is wealth creation. Homeownership has always been the first rung on the ladder that leads to forming household wealth. As Freddie Mac explains:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

Odeta Kushi, Deputy Chief Economist at First American, also notes:

“The wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth is…For the majority of households that transition into homeownership, the most recent data reinforces that housing is one of the biggest positive drivers of wealth creation.”

Last week, CoreLogic released their latest Homeowner Equity Insights Report, which reveals the surge in wealth created over the last twelve months through increased home equity. The report makes five key points:

  1. Roughly 38% of all homes are mortgage-free
  2. The average equity gain of mortgaged homes in the last year was $26,300
  3. The current average equity of mortgaged homes is greater than $200,000
  4. There was a 16.9% increase in total homeowner equity
  5. Total homeowner equity reached over $1.5 trillion

Here’s a map that shows the equity gains by state:What Is the #1 Financial Benefit of Homeownership? | Simplifying The MarketIncreasing equity is giving homeowners the power to better manage the challenges of the pandemic, especially for those spending more time at home. In the report, Frank Nothaft, Chief Economist for CoreLogic, explains:

“This equity growth has enabled many families to finance home remodeling, such as adding an office or study, further contributing to last year’s record level in home improvement spending.”

The financial advantage homeowners have has not gone unnoticed. In the same report, Frank Martell, President and CEO of CoreLogic, states:

“This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake.”

Increasing wealth benefits more than just homeowners.

Last year, the Rosen Consulting Group released a report outlining the benefits of homeownership. In that report, they explained what an increase in net worth – which they call the “wealth effect” – means to the economy:

“In economic literature, the wealth effect is a term used to describe the fact that individuals have a tendency to increase their spending habits when their actual or perceived wealth increases. For homeowners, the latent savings achieved by building equity in their home and the growth in home values over time both contribute to increased net worth. Through the wealth effect, this in turn translates to households having a greater ability and willingness to spend money across a wide range of other types of goods and services that spur business activity and provide a positive multiplier effect that creates jobs and income throughout the economy.”

Bottom Line

Homeownership builds wealth through equity, and this creates a positive impact for homeowners and their communities. Let’s connect today if you’re ready to invest in a home of your own.

Content previously posted on Keeping Current Matters

Let Go of Out Come and Know it will Happen in Finding a House in 2021 Real Estate Housing Market.

So This Year 2021 , The Housing Market in Westchester / Putnam Country Has been on Fire . Houses are get 5- 15 Offers With many of them going 2%-5% over asking price . This can be Frustrating to the most Buyers and Buyers with lower Down payment can be even Harder to get a House .

Most Real Estate agent would tell their buyers this the time you need to Really Go over the asking price . Before You Go and Do this Really Sit Back Do you need to purchase right Now . Why do you want purchase this House ? Why do you want be in this neighborhood ? Is the interest rates ? Do want get them this low ? If it about the interest Rates let me tell you they will stay low for the next 2 Years . Don’t Believe Real Estate agent with blog . Check it out for yourself Why mortgage will stay low for coming years . The House prices are going to go through the roof . I am here to be contrarian and say they will be falling . I don’t know when because I don’t have crystal bowl. Everything that goes up must come down . As The Boomers Retire there more need to Sell their Homes . The more of the change prices will have to be adjust to Supply and Demand.

I not say Hold off from Buying all together but If you keep losing out and your going 2% -5% over asking or you have low Down payment just not cutting it in this market . Just Remember this maybe a blessing . You not missing out . If you like to talk email me at . I know this market can be frustrating for Buyers .

I will leave you all with is one thought . I again I can be wrong about everything . Look at this picture . This is FEAR of FOMO. You never miss out your at the right place and right time . If you working to do the right thing .