Building Equity and Increasing Net Worth
Roseville, Calif.- Many homeowners have earned more than $100,00 in equity over the past ten years, according to the National Association of Realtors (NAR).
Home appreciation has risen along with prices in the last decade, giving many homeowners more than $100,000 in equity over that time period and is a strong signal that homeownership is a notable way to increase wealth.
According to the same report from NAR, middle-income homeowners have seen their property increase in value by 68 percent since 2012.
Low-income homeowners who earn less than 80% of their area’s median income saw $98,900 in equity gains in the same time period, while upper-income households who earn more than 200% of their area’s median income accrued $150,800 in equity, according to the NAR report, “Wealth Gains by Income and Racial/Ethnic Group.”
The NAR data demonstrates how owning a home is a key factor in increasing wealth. According to the NAR chief economist, “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
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