The National Association of REALTORS(R) has published a report investigating the positive social outcomes of homeownership. Reviewing existing academic research, Tennessee REALTORS(R) illustrates the importance of creating policies that support sustainable homeownership.
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Tennessee REALTORS(R) represents over 36,000 members statewide and works to support its member base by advocating for private property rights, promoting homeownership, and driving ethical business practices. The organization offers various services, including advocacy, market research, education, and professional development.
Beyond its membership, Tennessee REALTORS(R) influence is also evident in shaping real estate policies and practices at the state and local level. “Every American citizen deserves the chance to own their own home,” says 2024 Tennessee REALTORS(R) President, Regina Hubbard. “Homeownership is a major part of financial stability and community well-being. This country was built on it.”
Homeowner Wealth vs. Renter Wealth
Among the most compelling arguments for private homeownership is its marked effect on wealth accumulation. According to a recent analysis by NAR, the median net worth of homeowners is nearly 40 times greater than that of renters. In 2022, homeowners boasted a median net worth of $396,000, while renters had a median net worth of just $10,400. Undeniable by statistics alone, owning a home can spell major advantages for a homeowner’s financial future.
“Homes are more than just places to live. When cared for and loved, they become an asset that appreciates in value as the years pass. Smart homeowners can use this equity for future financial needs – even the big ones, like education, retirement, or starting a business,” Hubbard explains.
The wealth gap between homeowners and renters is largely driven by home equity. Homeowners benefit from property appreciation and the forced savings of paying a mortgage. In contrast, renters do not accumulate equity and are often subject to rising rental costs, making saving and investing difficult.
NAR’s report, “Wealth Gains by Income and Racial/Ethnic Group,” reveals that properties owned by middle-income homeowners have appreciated by 68% since 2012, allowing them to accumulate $122,100 in wealth. Low-income homeowners earning less than 80% of their area’s median income gained $98,900 in equity. In contrast, upper-income households, who earn more than 200% of their area’s median income, accrued $150,800 in equity.
“Homeownership is a catalyst for building wealth for people from all walks of life,” says Hubbard. “Homeowners build a net worth about 40 times higher than a renter’s. It’s not just about reduced rent costs – the home itself is a wealth-growing tool all on its own.“
Additionally, homeowners have reduced their debt by 21% over the last decade, partly by refinancing their mortgages at lower interest rates. In…
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