Homebuyers

Happy Homeownership Month: Why Homeowners Have 38 Times More Wealth Than the Typical Renter

Buying a home can really pay off, even if it may not feel like that in the moments after handing over your savings at the closing table.

The typical homeowner had about 38 times more wealth than the average renter between 2019 and 2022, according to the most recent Survey of Consumer Finances report. That’s because homes often appreciate dramatically over decades.

So, in honor of National Homeownership Month in June, let’s took a look at why owning a home may be a financially savvy decision for those who can afford the costs.

“Homeownership is [one of] the most important things to build wealth,” said New American Funding loan consultant Monique Sanchez, who is based in Santa Ana, Calif. “Having real estate wealth is key to building generational wealth [as] property values do go up over time.”

The average homeowner with a mortgage had roughly $295,000 in home equity in the fourth quarter of 2025, according to the most recent data from real estate data firm Cotality.

Equity is the percentage of the home that the homeowner actually “owns,” compared to remaining mortgage amount.

The longer homeowners stay in the properties, the more equity they often accrue.

In five years, home equity had increased about 45% from roughly $203,250 in the fourth quarter of 2020, according to Cotality. Over a decade, home equity shot up 121.7% from the fourth quarter of 2015 to the fourth quarter of 2025.

And the typical homeowner with a mortgage saw their home equity nearly quadruple after 15 years, according to the Cotality data.

All that means that the average homeowner saw their home wealth increase substantially over that time.

There are also other benefits, financial and social, to homeownership.

“[Mortgage payments are] different from rent because the majority of your payment, your principal and interest, is not going to change,” said New American Funding branch manager Brenda Robinson, who is based in Inglewood, Calif.

That means that while property taxes and home insurance costs may rise, you’re not at the mercy of a landlord who can just jack up the rent.

“There are tax deductions you’re able to get” as a homeowner, she said. “You can paint the wall whatever color you want to, you can put flowers in the front. It’s yours.”

There is also a social component to homeownership as you become part of a community.

“You begin meeting your neighbors,” said Robinson.

And while home prices may occasionally dip, such as during the Great Recession or in areas affected by natural disasters or struggling economies, they do tend to increase over the years.

Nationally, existing home sale prices increase an average of 5.6% a year, according to National Association of Realtors existing home data going back to 1969 through 2025.

Loan consultant Sanchez experienced these equity gains firsthand. In 2015, she bought a two-bedroom, two-bathroom condo for $375,000 in Southern California. Just over 10 years later, that condo is now worth about $775,000. That’s more than double what she paid for it.

When she hasn’t lived in it, she’s rented the property out. She recommends homeowners who lose their jobs consider renting out their homes if they can, so they can keep the property even if they can no longer afford the mortgage.

“My condo has always made me money,” said Sanchez. “When I pass, my kid will either have a home or will have the equity.”

Monique Sanchez NMLS # 694900

Brenda Robinson NMLS # 954742