Buying vs. Renting

Most owners have earned more than $100,000 in equity over the last decade, but discrepancies among racial groups persists, according to new NAR data.

Property appreciation has surged along with home prices in the last decade, giving most homeowners more than $100,000 in equity over that time period and lending further evidence that homeownership is an important avenue to build household wealth.

Middle-income homeowners have seen their properties appreciate by 68% since 2012, accumulating $122,100 in wealth, according to a new report from the National Association of REALTORS® released during the 2023 REALTOR® Broker Summit. Low-income homeowners who earn less than 80% of their area’s median income saw $98,900 in equity gains in the same time period, while upper-income households who earn more than 200% of their area’s median income accrued $150,800 in equity, according to NAR’s report, “Wealth Gains by Income and Racial/Ethnic Group.”

“This analysis shows how homeownership is a catalyst for building wealth for people from all walks of life,” says NAR Chief Economist Lawrence Yun. “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”

Along with these wealth gains, homeowners also saw their debt drop by 21% over the last decade, the report shows. In recent years, many homeowners were able to refinance their mortgages and secure an interest rate below 4%. And because of those smaller monthly payments, many homeowners have paid off an even larger amount of their mortgage, the report notes.