In an interview with CNBC, self-made millionaire David Bach stated that “buying a home is an escalator to wealth”. The average homeowner to this day is 38 times wealthier than a renter. The earlier you can get in the game of purchasing a home, the quicker appreciation begins working in your favor.
Young adults in particular aren’t hopping on this escalator, and it’s a costly mistake, Bach warns: “If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. He thinks that not prioritizing homeownership is “the single biggest mistake millennials are making.”
Your net worth will go up significantly just by purchasing a home and acquiring equity in it.
What is net worth? Why is it one of the top numbers you should be keeping track of? These are common questions buyers have when purchasing a home.
Net worth is described as the best way to understand your personal financial health and to reveal the progress you’re making toward saving and paying off debt. Basically, your net worth is all of your liabilities (or what you owe) subtracted from your total assets (what you own). An income may fund your daily expenses and pay the bills, but it’s your net worth that gives long-term financial security. Homeownership is a central part of the equation and is a singular wealth-building method in the U.S. economy today.
Homeownership builds wealth in two majors ways: through the “forced savings” of paying down a mortgage and through appreciation, or the increasing equity of your home.
For the fourth year in a row, Gallup reported that Americans picked real estate as the best long-term investment when given the choice between real estate, stocks, gold, savings accounts/CDs, or bonds. This year’s results showed that 34 percent of Americans chose real estate, followed by stocks at 26 percent.
Your house is typically your most valuable asset, but can simultaneously be your biggest liability depending on how long you’ve been paying on your mortgage. The longer you’ve been paying on your mortgage, the greater equiaty you have in your home – or the more net worth you have, because you own that portion of your home.
If you’re ready to begin or continue growing your net worth through homeownership, now is a great time to buy a new home! Our new homes offer spacious, open floor plans in the form of single-family homes, condos or townhomes in Tampa Bay’s best communities. Visit Digiovannihomes.com today to learn more!