Before the housing market hit rock bottom a few years ago, owning a home was viewed as one of the best possible investments someone could make. Now, however, where does it stand? Many people, especially those that either lost their home via foreclosure, were forced to short sale or lost a lot of equity, aren’t so confident in the fact that homeownership is still a good investment and should be used to gain personal wealth.
Although the housing market is still recovering, the good news is that purchasing a home is still one of the best investments out there. The Federal Reserve recently conducted a study to calm the fears of many people that had lost faith as homeownership as a good investment and found many promising things. Homeownership improves a family’s overall net worth; in fact, over 60% of the net worth for a family is in it’s home equity making it thirty times greater than the net worth of a renter. An average renter in America has a net worth of approximately $5000; the average homeowner’s net worth is almost $175,000. Doesn’t this seem like a much nicer number to you? Those that are still having a hard time believing can also find faith in the fact that home values throughout the nation have steadily increased in the past year, meaning the net worth of homeowners will only continue to increase.
The bottom line is this: if you’re looking for a good place to invest your money, the housing market is it. Whether you rent or already own, purchasing a house to use either as your primary residence or as a rental property can help you build equity and your personal wealth.