A Fannie Maesurvey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today’s power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:
88% - a better chance of saving for retirement
87% - the best investment plan
85% - the chance to be better off financially
85% - the chance to build up wealth
Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.
Does homeownership actually give you a better chance to build wealth?
No one can question a person’s unique feelings about the importance of homeownership. However, it’s fair to ask if the numbers justify homeownership as a financial asset.
Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that homeownershave forty times higher net worth than renters ($255,000 for homeowners compared to $6,300 for renters).
The difference in net worth between homeowners and renters has continued to grow. Here’s a graph showing the results of the last four Fed surveys:The above graph only includes data through 2019, but according to CoreLogic, the equity held by homeowners grew by $26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.
Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a study by First American shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:Others may think homeowners are older and that’s why they have a greater net worth. However, a Joint Center for Housing Studies ofHarvard Universityreport on homeowners and renters over the age of 65 reveals:
“The ability to build equity puts homeowners far ahead of renters in terms of household wealth…the median owner age 65 and over had home equity of $143,500 and net wealth of $319,200. By comparison, the net wealth of the same-age renter was just $6,700.”
Homeowners 65 and older have 47.6 times greater net worth than renters.
The idea of homeownership as a direct way to build your net worth has met the test of time. Let’s connect if you’re ready to take steps toward becoming a homeowner.
David Deem 714-997-3486 Dave@DeemTeam.com Whether you have moved into a brand-new house or to one that previously belonged to another family, you need to put some precautions in place. Here are several items that need your attention to keep you and your family safe. Change the locks The previous owners may have passed on spare keys to their neighbors, relatives or close friends. Even if it’s a brand-new house, the builder may have handed a key to a handyman or worker during the construction stage. To be safe, get all the locks changed and distribute spares only to those you trust. Install a security system Even in safe neighborhoods, a security system is a good precaution to take. You can decide whether you want a high-tech one with all the bells and whistles, or if you’re happy with a few cameras and security lights. Get to know your neighbors Neighbors are invaluable allies. Stop by for a chat and get to know them. They can easily keep an eye on your place but if
David Deem 714-997-3486 Dave@DeemTeam.com Many houses that were built before the 1980s contain asbestos. If asbestos is damaged or disturbed and fibers are released into the air, people can inhale them and eventually develop mesothelioma, a form of cancer, or other medical conditions. How Your Family May Be Exposed to Asbestos Asbestos fibers have been used in construction materials, such as flooring and ceiling tiles, insulation, pipes, paint, shingles and cement. Many applications were banned in the 1970s, but it is still legal to use asbestos in some building materials. Sawing, scraping, drilling and sanding materials that contain asbestos can release dangerous fibers into the air. If you attempt renovations yourself, you may disturb asbestos. Hire an Experienced Contractor If You’re Concerned About Possible Asbestos Before you decide to knock down walls or replace insulation, think about the age of your home and whether it may contain asbestos. Only certified professionals should
David Deem 714-997-3486 Dave@DeemTeam.com Are you looking to transfer property? If so, your property transfer may be exempt from reassessment for real estate property tax purposes. In California, the annual real estate tax on a parcel of property is limited to one percent of its assessed value (Proposition 13). The “assessed value” may not be increased by more than two percent per year unless the property has changed ownership. The following types of ownership transfers are not considered “changed ownership” and should not result in a reassessment. Please let your title or escrow officer know if one of the following exceptions applies to your transaction: Proposition 19 – The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act X Eligible homeowners who are 55 years and older, severely disabled, or victims of wildfires and natural disasters may transfer their tax assessments to a different home of the same or lesser market value,