Building Wealth Through Homeownership

I recently had someone ask me why homeowners are worth 36 times more than renters. Today I wanted to illustrate why homeownership is one of the best ways to grow wealth.

The average sale price for a single-family home in Massachusetts is $450,000. The latest Home Price Expectations Survey by Pulse Economics found that over the next five years, it is expected that homes will appreciate by 3.5% per year for a cumulative appreciation rate of 18%.

In the next five years, homes are expected to appreciate by 18%.

So in terms of that $450,000 house, it's expected that in five years, it will be worth $516,000 - a $66,000 gain! The best part is that the owners of this home will have done nothing different than the renters next door. Added improvements like kitchens and bathrooms will only bolster the value gain. Not to mention that a homeowner has the stability of a locked-in mortgage payment and the added benefits of writing off the interest.

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