What's Your Net Worth: Homeowners vs. Renters
Net worth isn't just for millionaires—it's for everyone. If you're considering homeownership, whether now or in the future, your net worth will thank you. Let's break down why below.
The Data
According to the Federal Reserve’s Survey of Consumer Finances (2022 report), between 2019 and 2022:
- The median net worth of U.S. homeowners rose to $396,200. (Federal Reserve)
- The median net worth of renters reached $10,400 in the same timeframe. (Federal Reserve)
This means that during that period, the typical homeowner had nearly 40 times more wealth than a renter.
That isn't the only study to reach that conclusion, either. A study by the Urban Institute observed that in 2022, the median wealth gap between homeowners and renters was almost $390,000, while the average wealth gap was more than $1,370,000—a historic high. (Urban Institute)
So Why Are Homeowners' and Renters' Net Worth's So Different?
The numbers are dramatic, but what’s behind them? Here are the main drivers:
1. Equity Is A Long Game
Each mortgage payment (after interest and taxes) helps chip away at your principal, which means your equity is growing. Over time, that equity becomes a large portion of your wealth.
2. Your Home Helps Your Bottom Line
Real estate tends to rise over long periods. When your home’s value grows, so does your net worth.
3. “Forced Savings” Will Actually Save You
Your home is like a piggy bank. Even during slow market years, that investment remains tied to an asset.
4. Wealth Diversification
Homeowners are more likely to have additional assets (investments, retirement accounts, or other properties) which further widen the gap. (Urban Institute)
5. Greater Stability & Predictability
With a fixed-rate mortgage, the bulk of your cost (principal + interest) is locked in. Renters face unpredictable rent increases and have less control over housing expenses, making long-term planning harder.
What This Means for You
You don’t have to wait for the perfect moment. Even in today’s market, owning a home is one of the most dependable ways to build generational wealth. Every month you pay rent is another month spent building your landlord's equity.
If you’re curious whether buying makes sense for you, tell us! We can see when and how homeownership could be the right move for you.
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