Terrylynn Fisher, CSP Realtor
Homeownership Builds Wealth for Households
The Federal Reserve Board estimates that homeowners have a net worth almost 36 times more than that of renters. In 2004, the median net worth for homeowners was $184,400 compared to $4,000 for renters. How do you build up your net worth? Through those “appreciating returns” on your home.
Your $210,000 home could be worth $312,080 in ten years (@ 4.5% annual appreciation). In addition, you are paying down the principal on your mortgage. Remember that $200,000 you borrowed at 6.5% over 30 years – that debt amount is decreasing every month and every year.
Year Home Price Mortgage Debt Net Worth
1 $210,000 200,000 $10,000
2 219,450 197,765 21,685
3 229,325 195,379 33,946
4 239,645 192,834 46,810
5 250,429 190,119 60,310
6 261,698 187,222 74,476
7 273,475 184,331 89,344
8 285,781 180,832 104,948
9 298,641 177,313 121,328
10 312,080 173,559 138,521
As your debt decreases and the home value increases, you accumulate wealth from the value of your home. In addition, over this ten-year period, you will have a significantly lower after-tax payment for housing. Each year as your home appreciates and you continue to pay down your mortgage debt, you increase your own net worth.
Homeownership – It’s NOT Just About Money
The “numbers tell the story” should ease your midn about the financial aspects of becoming a homeowner. But there are other, less monetary, benefits to homeownership. SEveral research studies indicate homeownership adds to the value of communities, has positive effects on children, and even contributes to increased voter participation rates.
Homeownership: The American Dream
More than two thrids of American households own their own home. They know the benefits of homeownership, from the accumulation of home equity, tax incentives, and the pride of owning a place of their own. They aslo had to take that first step of deciding, “I’m ready to be a homeowner.” Realtors assisted many of theose more than 71 million homeowners in both their decision to buy and their first time home purchase. Realtors are real estate professionals who are members of NAR and who abide by the Associations strict Code of Ethics and Standards of Practice. They can help guide you to first-time homebuyer programs in your area, as well as assist you in searching for and buying your home.
For more information, contact Terrylynn Fisher, CSP Realtor, 925.876.0966
DRE #615420
- Terrylynn Fisher has been a Kirkwood neighbor for over 30 years. Terrylynn has been a Realtor in Contra Costa County for over 32 years. She works with Diablo Realty in Walnut Creek and is consistently a top producer. Terrylynn is a local expert, please contact her for any Real Estate needs, or with a question about the area.
