The Average Homeowner Became 40 Times Wealthier Than Renters Over The Past 10 Years

Homeownership has many advantages: stability, a sense of community, tax deductions and, of course, the opportunity to build wealth over time.

Over the past 10 years, the median-priced home in the U.S. rose by $190,000 in value, making homeowners nearly 40 times wealthier than renters, according to a new report from the National Association of Realtors.

The report examined homeownership as a vehicle to build wealth over time, using data from 2012-2022 and studying the difference in wealth appreciation between income groups: Low-income homeowners (income no greater than 80% of the area median income), middle-income homeowners (income higher than 80% but less than 200% of the area median income) and upper-income homeowners (income higher than 200% of the area median income).

Low-income households built $98,910 in wealth from home price appreciation alone over the past decade; middle-income homeowners accumulated $122,070 in wealth; and upper-income homeowners accumulated more than $150,810 in wealth.

“Over a long time period, home ownership is a solid path towards building wealth,” Lawrence Yun, chief economist for the National Association of Realtors, told USA TODAY. “It works in two ways: First you have the advantage of home price appreciation, and second, it forces homeowners to save for monthly mortgage payments, which renters don’t have.”

Across the U.S., the 10 metropolitan areas where homeowners experienced the highest wealth gains, regardless of income, were all in California, with the San Jose area having the biggest gains. Homeowners in the San Jose metro area accumulated between $627,880 and $836,490 in wealth over the past decade.

The report also found that wealth gains from homeownership typically increase the longer one holds onto the property. For example, the median-priced home is worth $189,800 more now than in 2012 and $151,000 more compared to 2015.