There continues to be strong support for the association between owning a home and accumulating wealth. ~ Joint Center for Housing Studies, Harvard University
Minneapolis, Twin Cities Minnesota (PRWEB) December 12, 2014
The gap between homeowners and renters is widening; residential investors and homeowners who can finance an additional home purchase are buying up volumes of single-family homes. Meanwhile renters are finding rent prices continue to dip into more income, and they can't control the pace. Owning a home offers chances for a more secure financial future according to new assertions by the National Association of Realtors (NAR) and encourages reticent buyers to step forward.
"The recent housing crisis left a lump in many of our throats as we watched hard working and well-deserving homeowners lose their homes. It forced many families in the Twin Cities into renting while prospective first-time homebuyers are working harder to gain a home loan," says Jenna Thuening owner of Home Destination. "The good news in, that may be easier in 2015."
As the homeownership rate has dropped, housing experts are stressing that home ownership is still a viable way to establish greater wealth holdings for U.S. residents.
The number of hopeful homebuyers remaining in or converting to rental homes is growing. Many of the homes lost to a Minnesota foreclosure have been sense purchased by both seasoned and first-time real estate investors and converted to rental income homes. At the same time, Minneapolis home builders are racing to construct a sufficient number of apartments to keep pace with the growing demand. But many of those renters would prefer owning a home versus renting one, as shown in Realtor Magazine's December 8th article. It offers insights on why home ownership still trumps renting for overall wealth.
The latest findings support previous research that fixed beliefs that home ownership in one of life’s most powerful ways to build individual wealth. Today's contrast is quite stark between the median net worth of home owners and that of renters, according to the Center for Responsible Lending of Federal Reserve Board’s Survey of Consumer Finances. Data from 2013 shows that homeowner net worth was $195,400; the median net worth for renters was a mere $5,400.
“Home ownership long has been central to Americans’ ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of home owners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth,” according to a November 29 New York Times editorial.
For some, having a home slip out of their grasp caused a loss of confidence in home ownership. After shaken by losing a home – or seeing family loose a home, cautious individuals may opt to rent; the slice of renters has jumped approximately 25 percent since housing’s tumble. The titter-totter between the levels of homeowners and renters has tipped from a high of near 70 percent in 2004 to a twenty year bottom of 64.3 percent. The numbers clearly indicate that home ownership is better than renting, and while many cannot afford it, they still want it.
The discipline of saving that a buyer has won in the process of preparing to be a homeowner extends well past the purchase. Those that rent may not be forced to learn that practice and as rent grows, it is harder to save. Homeowners who refinance have the added chance to gain diminishing monthly payments in contrast to rental contracts that increase in price each year.
About Home Destination - Twin Cities Real Estate:
Home Destination offers a loyal and committed real estate professional service that personally handles all of the details of selling or purchasing homes in the Twin Cities. Highly regarded by peers as a Minneapolis metro expert for over 15 years, gain a skilled representative as guide to make the best possible housing decisions. Helping all home buyer types, from Millennials seeking to buy their first home to individuals moving-up to a larger luxury home, Jenna Thuening has the real estate experience and acumen buyers and sellers benefit from.