According to the Census, the US homeownership rate is on the rise. This comes as no surprise to those who have observed the housing market frenzy over the last two years especially.
In the graph below, note that data shows more than half of the US population live in a home they own, and the percentage is growing with time.
There are several reasons why so many people see the value of homeownership.
Homeownership can help protect you from rising costs, especially when inflation is high like it is today. Per Lawrence Yun, Chief Economist at the National Association of Realtors (NAR):
“In the 1970s, when inflation was running around 10%, home prices were rising at approximately the same rate. Renters actually have a harder time in inflationary periods, because rents tend to rise along with inflation, whereas mortgage payments stay the same for homeowners with fixed-rate mortgages.”
Buying a home with a fixed-rate mortgage locks in what’s likely your biggest monthly expense – your housing payment - for the duration of that loan, often 15-30 years. This gives you a predictable monthly housing expense that can benefit you in the short term, but you’ll also gain equity over time as your home appreciates in value and you make your monthly mortgage payment.
And with that growing equity, your net worth will increase as well. In fact, the latest data from NAR shows the median household net worth of a homeowner is roughly $300,000, while the median net worth of renters is only about $8,000. That means a homeowner’s net worth is nearly 40 times that of a renter.
There are also many emotional, intangible benefits of owning a home that can’t be measured in dollars and cents.