Posted On January 05, 2017
Home values, like other economic measures, are cyclical. It is widely accepted that buying a home is an investment in the future. Even in periods of recession, homes can increase in value. The government puts forth affordability initiatives to close the homeownership gap, emphasizing its fundamental role in providing financial security. When construction slows and available inventory lessens, sellers of existing homes have an advantage as their homes’ value goes up. To download the full case study, please click here to access resource.
The difference in average net worth between homeowners and renters is staggering. As of October 2015, the Federal Reserve reported that a typical homeowner’s net worth was $195,400 while a renter’s was only $5,400, and projected the 2016 figure to be in the range of $225,000 - $230,000 for homeowners and approximately $5,000 for renters. Homes almost always appreciate in value, even with market fluctuations. In periods of a recession, home value may decline temporarily, but will rebound to appreciate at a slower rate.
The creation of wealth through Homeownership depends on five factors:
*Please consult a tax advisor for specific details.