The National Association of Realtors (NAR) recently released a report revealing that the growing wealth gap in this country has been impacted by the recent increases in real estate values coupled with the drop in homeownership rates. The report discloses:
“Over 90 percent of metro areas have experienced declining homeownership rates at a time when home values have risen and incomes have remained flat.”
Increasing home values in many regions of the country have helped homeowners build housing wealth in recent years. However, the continued decline in homeownership means this increase in wealth is shared by fewer people and likely leading to worsening inequality in the U.S.
Below is a chart showing the aforementioned increasing gap between renters and homeowners in regard to family wealth:
Source: Federal Reserve & NAR
What this means for you
If the experts are correct and a homeowner will really have an average of 45x the net worth of a renter by the end of the year, doesn’t it make sense to evaluate if a purchase could be in your future?