Skip to main content

#1 Financial Benefit of Homeownership: Family Wealth

#1 Financial Benefit of Homeownership: Family Wealth

#1 Financial Benefit of Homeownership: Family Wealth | MyKCM

While growing up, we were taught by our parents and grandparents that owning a home is a financially savvy move. They explained how a mortgage is like a “forced savings plan.” When you pay rent, that money is lost forever. When you make a mortgage payment, much of that money accumulates as equity in the home. So, what exactly is equity?

The equity in your home is the amount of money you can sell it for minus what you still owe on the mortgage. Every month you make a mortgage payment, and every month a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity.

A recent study by CoreLogic explained that homeowners gained substantial equity over the last twelve months, and are essentially sitting on large sums of cash in their homes. In the study, Frank Nothaft, Chief Economist for CoreLogic explained:

“The CoreLogic Home Price Index recorded a quickening of home price gains during the fourth quarter of 2019, helping to boost home equity wealth. The average family with a mortgage had a $7,300 gain in home equity during the past year, and a total of $177,000 in home equity wealth.”

For most families, their home is their largest financial asset. This increase in equity drives the net worth, or family wealth, of the homeowner. Renters are not earning that benefit. Instead, they’re building the net worth of their landlord.

Bottom Line

Home price growth will moderate during the pandemic. But once a cure is available, most experts agree that home values will again begin to appreciate at levels similar to what we’ve seen over the last several years. In the long run, our family elders will be proven correct: owning a home is a savvy financial move.

Comments

Popular posts from this blog

4 Things To Expect from the Spring Housing Market

Spring is in full swing, and the housing market is picking up along with it. http://dlvr.it/TJjhYP

So you’re thinking about buying your first home.

Moving Into Your New Home : One of the most important parts of a real estate transaction is moving! Gayla Dixon from UniGroup, the parent company of United Van Lines and Mayflower Transit, shares money-saving strategies for moving and how decluttering can help you feel better about getting into your new location https://www.sellagent369.com/results/?

Why Buying Real Estate Is Still the Best Long-Term Investment

FYI: Lately, it feels like every headline about the housing market comes with a side of doubt.  http://dlvr.it/TLBsbl

Buying Your First Home? FHA Loans Can Help

FYI: If you’re a first-time homebuyer, you might feel like the odds are stacked against you in today’s market. But there are resources and programs out there that can help – if you know where to look. http://dlvr.it/TLJTBx

If Housing Affordability Is About the Money, Don’t Forget This.

There are many non-financial benefits of buying your own home. However, today’s headlines seem to be focusing primarily on the financial aspects of homeownership – specifically affordability. Many articles are making the claim that it’s not affordable to buy a home in today’s market, but that isn’t the case. Today’s buyers are spending approximately 20% […] http://dlvr.it/S6M6JW

Why Most Sellers Hire Real Estate Agents Today

ICYMI: Selling your house without an agent as a “For Sale by Owner” (FSBO) may be something you’ve considered. But you should know that, in today’s shifting market, more homeowners are deciding that’s just not worth the risk. http://dlvr.it/TLPtJw

The Surprising Amount of Home Equity You’ve Gained over the Years

ICYMI: There are a number of reasons you may be thinking about selling your house. http://dlvr.it/TD4JND

Checklist for Getting Your House Ready To Sell

ICYMI: Getting your house ready to sell? Here are a few tips on what you may want to do to prepare. http://dlvr.it/TDF4HK

"Maximizing Your Home's Value: Tips for Selling Your Property in Today's Market"

"Maximizing Your Home's Value: Tips for Selling Your Property in Today's Market" If you're thinking about selling your home, now is a great time to take advantage of the current real estate market. With low inventory levels and high demand, sellers are in a prime position to maximize the value of their property. However, selling a home is not as simple as just listing it and waiting for offers to come in. There are several steps you can take to ensure that your home is positioned for success and that you get the best possible return on your investment. Preparation is Key:  1)   The first step in selling your home is to prepare it for the market. This includes decluttering, cleaning, and making any necessary repairs or renovations. By presenting your home in the best possible light, you increase the likelihood of attracting interested buyers and securing a higher price.  2)    Hire a Professional Realtor: Working with a professional realtor is one of the best w...