NAR releases new figures
American households gained a total of $8.2 trillion in housing wealth in 10 years, a new study from the National Association of Realtors has revealed.
Between 2010 and 2020, high-income homeowners saw the largest share of gains among all income groups, claiming about 71% of all wealth accumulation. Middle-income households, which amassed $2.1 trillion in total housing wealth, followed at 26%. Among low-income households, home equity increased by $296 billion (4% of the housing wealth gain).
“Owning a home continues to be a proven method for building long-term wealth,” said NAR chief economist Lawrence Yun. “Home values generally grow over time, so homeowners begin the wealth-building process as soon as they make a down payment and move to pay down their mortgage.”
“These escalating home values were no doubt beneficial to homeowners and home sellers,” Yun added. “However, as these markets flourish, middle-income wage earners face increasingly difficult affordability issues and are regrettably being priced out of the home-buying process.”
The study found that the overall homeownership rate has plummeted across all income groups since the Great Recession, with the biggest drop among the middle-income homeownership rate – down from 78.1% to 69.7%. Homeownership rates among low-income households fell by 2%, and high-income households saw a four-percentage-point drop.
“Homeownership is rewarding in so many ways and can serve as a vital component in achieving financial stability,” said NAR President Leslie Rouda Smith. “Now, we must focus on increasing access to safe, affordable housing and ensuring that more people can begin to amass and pass on the gains from homeownership.”