Don't Be Average! Home Owners Have 40X the WEALTH vs Renters!

Recent headlines have reported that only about 1 in 5 average Americans think now is a good time to buy a house. This is the lowest it's ever been since 1978. Why? It's mainly because borrowing money to buy a house and house prices have recently increased. This has made it difficult for more people, especially young ones, to buy a home. DO NOT BE AVERAGE…..Keep reading!

Here's something interesting to always remember. You're forced to save money when you buy a house and slowly pay it off. How? Well, each payment you make increases your ownership of the house, which is like building up your wealth. It's almost like a piggy bank that grows as you pay off your house. When you pay rent, 100% of the payment is like interest, and you have ZERO equity in the home you are living in.

In fact, homeowners often have a lot more wealth than those who rent. In 2019, homeowners were net worth about 40 times more than renters. 40 TIMES! $255,000 for homeowners to $6,300 for renters! That's a tremendous difference! As a matter of fact, I have NEVER seen a person who owned their home long term not walk away for the closing of their house without a FAT check! 

But right now, because of the high costs and interest rates, many younger people are choosing to wait to buy a house. They're unsure about how the economy will be, and costs of living, like rent, are also going up. Despite these challenges, many people still think real estate is a good way to invest money for the future. However, the number of people who believe this is starting to decrease. Do not be one of them! See the net worth difference in the above paragraph! 

It's important to remember that current mortgage interest rates are still quite low, historically speaking. Looking back over the past 40 years, there have been times when mortgage rates were much higher. In the early 1980s, for example, interest rates peaked at an average of over 16% due to high inflation. Even in the 1990s, rates were often around 7-10%. Today, despite recent increases, they're still typically below 7%.

While it may seem a bit tougher to get into home ownership right now due to current costs and interest rates, let's not forget the significant long-term benefits of owning a home. When you buy a house, you're not just purchasing a place to live. You're investing in your future. Each payment you make is like putting money into a savings account that typically grows over time. Historically, homeowners have a net worth 40 times that of renters, showcasing this investment's true power.

Yes, there are challenges today. There are ALWAYS challenges, especially for younger folks. But remember, the journey of home ownership is a marathon, not a sprint. Patience, planning, and persistence can help overcome these hurdles. After all, in the long run, homeowners tend to come out ahead financially. So keep the faith and keep striving towards that goal of home ownership. It's a journey well worth the effort.