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Homeownership Is a Catalyst for Building Wealth

Improving affordable homeownership leads to numerous outcomes that extend beyond the house, such as greater economic stability, access to quality education, increased civic and social engagement, better health, and a reduced environmental footprint.

This article is the first in a series that explores the benefits of homeownership and the advantages that homeowners enjoy over renters.

In the U.S., there is a correlation between homeownership and net wealth.

What exactly does that mean? On average, each year of homeownership tends to be associated with an additional $9,500 in net wealth. According to the Federal Reserve's latest survey of consumer finances, the average renter's net wealth only increased by $260 between 2010 and 2019. Homeowner net wealth increased by a whopping $51,050 during the same time period. 

Additionally, U.S. homeowners have an average net wealth that is 400% higher than that of renters with similar demographics and earnings, and home equity represents the largest proportion of wealth (34.5%) for U.S. households. In 2019, net wealth was lower for lower-income ($9,300), Black ($24,100), and Hispanic/Latinx households ($36,050) than for higher-income ($1,589,300) and white households ($189,100). 

Home equity represented a larger share of net wealth for low-income households and Black and Hispanic/Latinx households

How Habitat Contributes

  • Habitat partners with families to lower barriers to affordable homeownership and create opportunities for those who may not otherwise have access to owning a home, enabling them to grow their net wealth through forced savings and property value appreciation.
  • Habitat’s focus on working with low- and moderate- income families and serving a diverse network of homeowners — in FY2020, 41% and 17% of families served by Habitat were Black and Hispanic/Latinx, respectively — means that the home equity Habitat families gain likely constitutes a large share of their overall net wealth.
  • Habitat advocates for financial resources and public policy to make homeownership more accessible and affordable for lower-income households.

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