Housing Wealth Gains at Every Level
One of the most famous adages in investing is “It’s not about timing the market, it’s about your time in the market.” The longer you stay invested, the more the value of your asset will rise thanks to time and the magic of compounding. As for market timing, good luck — even stock market experts aren’t great at ‘buying low and selling high’.
The same goes for housing. Starting early and staying invested through the (mostly) ups and (occasionally) downs builds wealth. A lot of it, in fact. Where else can you control a huge, appreciating asset with just 10% down?!
A recent study done by the NAR found that over the last decade, the median-priced home appreciated by about $190,000. These gains, plus the ‘forced savings’ of paying the monthly mortgage, mean that the net worth of a typical homeowner was about 40x that of a typical renter!
Importantly, these wealth gains were experienced by people of all income levels owning homes at all price points. In fact, the % increase in net worth experienced by lower-income homeowners (as they move from rent → buy) is probably higher than for any other income group.