The Wealth Gap: Homeowners vs. Renters

Every three years, the Federal Reserve Board publishes the Survey of Consumer Finances (SCF), which examines the wealth of homeowners and renters. This latest report, shared by KCM, reveals a significant net worth difference: while homeowners’ average net worth is around $255,000, renters lag far behind at an average of just $6,300. This wealth gap has only widened in recent years as homeowners continue to build equity.

Why Homeownership Builds Wealth

The key to this wealth difference lies in home equity. Home equity is the portion of your home’s value that you truly own, which grows as you pay down your mortgage and as property values increase. Over recent years, home prices have surged in Glenview, IL  due to limited housing inventory, meaning homeowners have seen their equity rise sharply—leading to substantial gains in net worth.

While housing inventory has increased slightly in 2024, demand still outpaces supply in many regions including Glenview, IL, keeping prices steady. Experts, as highlighted by KCM, predict that home prices will continue to rise in Chicago’s Northshore and other regions in the United States, albeit at a more moderate pace. This forecast suggests that now may still be a strategic time to buy, especially for those seeking to grow their financial portfolio through homeownership in Glenview IL.

Expert Insights on Wealth Accumulation Through Homeownership

“Homeownership remains one of the most significant contributors to household wealth in the United States,” says Ksenia Potapov, an economist at First American. Even with some volatility in the market, owning a home provides opportunities for long-term wealth accumulation—a benefit renting simply doesn’t offer.

However, real estate trends vary by area, so working with a local Glenview real estate expert, such as Vittoria Logli Group,  they help you make an informed choice. As noted by Bankrate, “Deciding between renting and buying a home isn’t just about cost; it also involves long-term financial strategies and personal circumstances.” A knowledgeable Glenview real estate agent can provide insights specific to your local market, helping you evaluate the financial and lifestyle benefits of owning a home in your area.

Bottom Line

If you’re undecided about renting or buying, remember that owning a home can significantly boost your net worth over time. Even if homeownership feels out of reach, connecting with a real estate agent such as top realtor Vittoria Logli Team,  and lender can help you explore financing options that may make buying a home possible. The potential for wealth growth through homeownership, as outlined by KCM, is undeniable—making it a powerful option for those aiming to secure a stronger financial future