Facebook
X
Pinterest
Copy Link
Renting vs. Buying: The Net Worth Gap You Need To See
Trying to decide between renting or buying a home? One key factor that could help you choose is just how much homeownership can grow your net worth.
Every three years, the Federal Reserve Board shares a report called the Survey of Consumer Finances (SCF). It shows how much wealth homeowners and renters have – and the difference is significant.
On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. Check out the graph below to see the difference for yourself:
Why Homeowner Wealth Is So High
In the previous version of that report, the average homeowner’s net worth was about $255,000, while the average renter’s was just $6,300. That’s still a big gap. But in the most recent update, the spread got even bigger as homeowner wealth grew even more (see graph below):
As the SCF report says:
“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”
One big reason why homeowner wealth shot up is home equity.
Equity is the difference between your home’s value and what you owe on your mortgage. You gain equity by paying down your mortgage and when your home’s value goes up.
Over the past few years, home prices have gone up a lot. That’s because there weren’t enough available homes for all the people who wanted one. This supply-demand imbalance pushed home prices up – and that translated into faster equity gains and even more net worth for homeowners.
If you’re still torn between whether to rent or buy, here’s what you should know. While inventory has grown this year, in most places, there’s still not enough to go around. That’s why expert forecasts show prices are expected to go up again next year nationally. It’ll just be at a more moderate pace.
While that’s not the sky-high appreciation we saw during the pandemic, it still means potential equity gains for you if you buy now. As Ksenia Potapov, Economist at First American, explains:
“Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”
But prices and inventory are going to vary by area. So, lean on a local real estate agent. They’ll be able to give you the local trends and speak to the other financial and lifestyle benefits that come with owning a home. That crucial information will help you decide the best move for you right now. As Bankrate explains:
“Deciding between renting and buying a home isn’t just about cost — the decision also involves long-term financial strategies and personal circumstances. If you’re on the fence about which is right for you, it may be helpful to speak with a local real estate agent who knows your market well. An experienced agent can help you weigh your options and make a more informed decision.”
Bottom Line
If you’re not sure if you should rent or buy, keep in mind that if you can make the numbers work, owning a home can really grow your wealth over time.
And if homeownership feels out of reach, let’s connect so we can explore programs that may make buying possible.
Avoid These Top Homebuyer Mistakes in Today’s Market
No one likes making mistakes, especially when they happen in what’s likely the biggest transaction of your life – buying a home.
That’s why partnering with a trusted agent is so important. Here’s a sneak peek at the most common missteps buyers are making in today’s market and how a great agent will help you steer clear of each one.
Trying To Time the Market
Many buyers are trying to time the market by waiting for home prices or mortgage rates to drop. This can be a really risky strategy because there’s so much at play that can have an impact on those things. As Elijah de la Campa, Senior Economist at Redfin, says:
“My advice for buyers is don’t try to time the market. There are a lot of swing factors, like the upcoming jobs report and the presidential election, that could cause the housing market to take unexpected twists and turns. If you find a house you love and can afford to buy it, now’s not a bad time.”
Buying More House Than You Can Afford
If you’re tempted to stretch your budget a bit further than you should, you’re not alone. A number of buyers are making this mistake right now.
But the truth is, it’s actually really important to avoid overextending your budget, especially when other housing expenses like home insurance and taxes are on the rise. You want to talk to the pros to make sure you understand what’ll really work for you. Bankrate offers this advice:
“Focus on what monthly payment you can afford rather than fixating on the maximum loan amount you qualify for. Just because you can qualify for a $300,000 loan doesn’t mean you can comfortably handle the monthly payments that come with it along with your other financial obligations.”
Missing Out on Assistance Programs That Can Help
Saving up for the upfront costs of homeownership takes some careful planning. You’ve got to think about your closing costs, down payment, and more. And if you don’t work with a team of experienced professionals, you could miss out on programs out there that can make a big difference for you. This is happening more than you realize.
According to Realtor.com, almost 80% of first-time buyers qualify for down payment assistance – but only 13% actually take advantage of those programs. So, talk to a lender about your options. Whether you’re buying your first house or your fifth, there may be a program that can help.
Not Leaning on the Expertise of a Pro
This last one may be the most important of all. The very best way to avoid making a mistake that’s going to cost you is to lean on a pro. With the right team of experts, you can easily dodge these missteps.
Bottom Line
The good news is you don’t have to deal with any of these headaches. Let’s connect so you have a pro on your side who can help you avoid these costly mistakes.
Why Your House Will Shine in Today’s Market
Even though there are more homes available for sale than there were at this time last year, there are still more buyers than there are houses to choose from. So, know that if you’ve got moving on your mind, your house can really stand out.
There are several key reasons why there aren’t enough homes to go around and understanding them will help you see why the market is working in your favor if you’re ready to make a move.
What’s Causing the Shortage?
1. Underproduction of Homes: For years, the industry hasn’t built enough homes to keep up with demand. As Zillow explains:
“In 2022, 1.4 million homes were built — at the time, the best year for home construction since the early stages of the Great Recession. However, the number of U.S. families increased by 1.8 million that year, meaning the country did not even build enough to make a place for the new families, let alone begin chipping away at the deficit that has hampered housing affordability for more than a decade.”
2. Rising Costs: Building materials, labor shortages, and supply chain disruptions caused by the pandemic have all made it harder and more expensive to build homes. This can either limit or stop new home construction in some areas.
3. Regional Imbalances: Some markets are more affected by the shortage of homes than others. Popular and more desirable areas have more people moving in faster than new homes can be built. The number of new building permits issued doesn’t always keep pace with job growth in these regions, and that leads to even tighter markets and higher prices.
How Big Is the Problem?
According to estimates from Real Estate News, the U.S. is facing a housing shortfall of roughly 3.3 million homes, based on an average of several expert insights (see graph below):
This shows there’s a significant number of homes that need to be built just to meet current demand from buyers. But what about future demand?
According to John Burns Research and Consulting (JBREC), over the next 10 years, the U.S. will need about 18 million new homes to meet projected demand, including homes for new households, second homes, and replacements for aging or unusable homes.
So, even though more homes are on the market compared to last year, there still aren’t enough of them to go around. This is where you can really win if you’re ready to sell your house.
What You Need To Remember
If you’re thinking about selling, the shortage of homes for sale means your house is likely to get some serious attention from buyers. It’ll take years to climb out of this inventory deficit, and the market is still very tight. So, when buyers are competing for relatively few homes like they are right now, that creates more interest in the houses that are on the market, putting upward pressure on prices and ultimately working in your favor.
And since every market is different, it’s important to work with a real estate agent who understands local trends. They can help you price your house right and create a strategy to attract the right buyers.
Bottom Line
While there are more homes for sale than there were at this time last year, there’s still a shortage overall. And this puts you in the driver’s seat as a seller. Let’s connect so you have someone who can help you take advantage of today’s market.
The Benefits of Using Your Equity To Make a Bigger Down Payment
🏠 Did you know? Homeowners are often able to put more money down when they buy their next home. That’s because, once they sell, they can use the equity they have in their current house toward their next down payment. And it’s why as home equity…. Read more….
How Much Does It Cost To Sell My House?
🏠 If you’re toying with the idea of selling your house, you’re probably wondering how much it’ll cost. To be honest, the final number will depend on several factors like…. Read more….
Now’s the Time To Upgrade to Your Dream Home
🏠 If you’ve been wanting to sell your house and move up to a bigger or nicer home, you’re not alone. A recent Inman survey reveals the top motivator for today’s homebuyers…. Read more….
Why Buying Now May Be Worth It in the Long Run
🏠 Should you buy a home now or should you wait? That’s a question a lot of people have these days. And while what’s right for you is going to depend on a lot of different factors, here’s something…. Read more….
1005 whistler Dr
FOR SALE
→ 1005 whistler Drive
$559,000
Suisun City
1005 whistler Drive
4 Bedrooms | 2 Baths | 1,308 sq. ft
$559,000
- MLS#: 325009115
- Bedrooms: 4
- Bathrooms: 2
- Living Space: 1,308 sq. ft.
- Lot Size: 5,663 sq. ft.
- Garage: 2 Car
- Subdivision: Dover Terrace South
- New Paint Interior/Exterior
- New flooring
- New Landscaping
- New Kitchen Remodel
- Stainless Steel Appliances
- Stone Countertops
- Fireplace
- New Bathroom Remodel
- Large Backyard
- Patio in Rear
- RV Parking
- HVAC
- Newer Windows
Welcome to Your Suisun City Retreat!
Perfectly positioned with quick access to Highway 12 and just minutes from I-80, this freshly renovated 4-bedroom, 2-bathroom home offers modern updates and an incredible lifestyle in one of the Bay Area’s best-kept secrets. Step inside to find new flooring, contemporary lighting, and fresh interior and exterior paint, creating a bright and inviting space. The updated kitchen boasts brand-new cabinets, appliances, and generous counter space, while the cozy fireplace in the living area makes for a perfect gathering spot.
Outside, the spacious backyard provides RV parking and room to relax, with space to create your ideal outdoor retreat. Beyond your front door, Suisun City’s waterfront district awaits, where you can enjoy dining at Athenian Grill, Chianti Osteria, or Ironwood American Bistro, shop local boutiques, or take a scenic stroll along the marina. Outdoor enthusiasts will love paddleboarding, kayaking, and biking along the waterfront trails, while annual events like the Suisun City Waterfront Festival and Fourth of July Fireworks bring the community together. Plus, with affordable housing compared to the rest of the Bay Area, this home is a rare opportunity to enjoy a high quality of life at a fraction of the cost. Move-in ready and packed with modern updates—this Suisun City gem won’t last long!
WHO YOU WORK WITH MATTERS
Selling or buying a home is never an easy process. It is often the biggest investment people will make in their lifetime. It is important to work with someone who has the right product knowledge, solid reputation, and who earns your trust from beginning to end. It has always been my goal to provide my clients with the ultimate care and market knowledge essential for a successful transaction. As one of the partners at NavigateRE, formerly the #7 RE/MAX Team in the world. I am able to deliver powerful results using our local and global networks.
I’ve had the good fortune to sell homes throughout the Solano and Napa area, each one being an opportunity to connect with individual communities. It is this connection with the communities in which I work that has led me to be so passionate about real estate.
If you live here already, you know how blessed we are. If you’re considering living or investing here, you’ve probably experienced some of the area’s extraordinary possibilities: country settings and small-town communities; enthralling agricultural beauty, and true farm to fork lifestyle, If Solano and Napa Counties are your real estate destination, you’ve arrived at the right spot.
In my free time, I enjoy our stunning lakes, scenic hikes, and local gyms. I'm not just a REALTOR®; I'm a community advocate, tech enthusiast, and your reliable partner in turning your real estate dreams into reality.
DRE Lic# 02221115
Walter Christiam
What My Clients Have To Say
