Homeowners Own More Assets, Have Higher Net Worth

Data from recent years has highlighted the wealth gap between homeowners and renters, showing homeowners owning more assets and having an overall higher net worth, reports the National Association of Home Builders. 

Data from the 2022 Survey of Consumer Finances found that while almost every household owned some assets, those who owned a home owned the vast majority of assets in aggregate. These assets included other residential real estate, vehicles, other non-financial assets, business interests, stocks and bonds, retirement accounts and other financial assets. 

In contrast, renters did not own as many assets as homeowners. Overall, renting households most significantly owned assets including vehicles, non-financial assets, business interests, retirement accounts and other financial assets. Still, homeowners owned 16 times more stocks and bonds and 15 times more business interests and retirement accounts than renters.  

Notably, age plays a role in wealth. While data shows that home equity rises as homeowners age, renters, especially those over 65, see a significant decrease in net worth as they age. The median value of renters’ financial and non-financial assets dropped by almost half form the median value when they were under 35.  

Overall, the 2022 SCF reported that homeowners had a median net worth of $396,000, compared to renters’ median net worth of just $10,400.  

Homeownership plays a key role in wealth accumulation, as homeowners build equity, benefit from home price appreciation and typically own more assets than renters. However, although homeownership is key to building wealth, most households will rent before they own a home, making the rental market an essential part of the process.