From Great Recession to Great Wealth: Homeowners' Property Values Soar

The American Dream Pays Off Big: Homeowners Have Seen Their Property Values Shoot Up This Much
 By Clare Trapasso

Homeownership has proven to be a reliable pathway to wealth creation, according to a recent report from the National Association of Realtors.

Homeowners, particularly middle-class buyers who purchased real estate during the Great Recession, have accumulated substantial wealth over the past decade. These buyers have witnessed home price appreciation, resulting in an average wealth accumulation of over $122,000, representing a 68% increase in property values since 2012. Wealthy homeowners saw an average gain of nearly $151,000, while low-income homeowners saw a gain of about $99,000.

Owning a home allows homeowners to build wealth in many ways. A mortgage payment can be considered a form of "forced savings," and home values increase over time, contributing to price appreciation. In addition, homeownership creates long-term financial stability, and homeowners typically have net worth that are 40 times that of renters.

The benefits of homeownership have helped homeowners across the country in various ways, such as funding college educations, paying down debt, and weathering costly emergencies. Homeownership can also help create long-term wealth and financial stability for future generations.

Despite the overall benefits of homeownership, Black homeowners have seen the lowest appreciation in home values compared to any other racial group, according to the National Association of Realtors.

Since 2012, the value of homes owned by Black homeowners has increased by only about $115,000, compared to $239,000 for Asian homeowners, $162,000 for Hispanic homeowners, and $138,000 for white homeowners. This is likely due to discriminatory housing policies, such as redlining, which restricted people of color from buying homes in predominantly white neighborhoods.

Black Americans also have the lowest homeownership rates in the country at 44.9%, compared to 74.9% for white Americans. The median value of homes owned by Black Americans is $240,000, while the median value is $308,000 for Hispanic-owned homes and $310,000 for white-owned homes. Homes owned by Asians have the highest median value at around $575,000.

Overall, the NAR report highlights the importance of homeownership in building wealth and financial stability, making it an attractive option for those seeking long-term investment opportunities.