The Net Worth of a Homeowner is 44x Greater Than A Renter!

Every three years, the Federal Reserve conducts their Survey of Consumer Finances in which they collect data across all economic and social groups. Their latest survey data, covering 2013-2016 was recently released.

The study revealed that the median net worth of a homeowner was $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why, for the fifth year in a row, Gallup reported that Americans picked real estate as the best long-term investment. This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26% and then gold, savings accounts/CDs, or bonds.

Greater equity in your home gives you options

If you want to find out how you can use the increased equity in your home to move to a home that better fits your current lifestyle, let’s get together to discuss the process.

 

Posted by The KCM Crew

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3 Tips for Making Your Dream of Owning a Home a Reality [INFOGRAPHIC]

Some Highlights:

  • Setting up an automatic savings plan that saves a small amount of every check is one of the best ways to save without thinking much about it.
  • Living within a budget right now will help you save money for down payments while also paying down other debts that might be holding you back.
  • What are you willing to cut back on to make your dreams of homeownership a reality?

 

Posted by The KCM Crew

Are you ready to find your next home? Visit our website today to get started!

Down Payment Savings Tips for Renters

These clever ideas put homeownership within reach.

Ah, the perks of being a renter. No mortgage payments, no property taxes, no pesky maintenance work or repairs (leave that to your landlord to take care of!). Sounds like a good life, right?

Oh, wait, we almost forgot the big drawback: You’re not actually gaining equity in a home.

So what’s stopping you from buying a home? If you’re like most renters, it’s the lack of cash for a down payment.

Indeed, one in five Americans doesn’t even have a savings account — and one-third of those who do have a zero balance on their account, according to a recent survey by personal finance website GOBankingRates.com. Yikes!

The good news is, there are some simple ways to start saving money for a home purchase. Make these moves to build your down payment fund.

Set a target goal

Figuring out exactly how much house you can afford is key, because it allows you to determine how much you’ll need for a down payment.

Then put together a detailed savings plan, advises Andrea Blackwelder, Denver financial planner and founder of Wisdom Wealth Strategies.

Research shows people who set specific savings goals do a better job at putting money away than those who don’t.

“Just saving for a down payment isn’t enough,” Blackwelder says. “You need a hard dollar amount that you can work toward.”

Assess your spending habits

Look at your bank and credit card statements from the last three months to see where your money is going, then identify areas where you can cut back, says Brandy Wright, a certified financial planner at Cambridge Wealth Counsel in Atlanta.

Shrink your TV package

The average cable TV bill hit a record $99.10 last year, up 39 percent from 2010. Unless you’ve already cut the cord, downsizing your cable plan — and streaming shows instead — can help you save money.

Not willing to give up channels? Call you cable provider anyway, and try to negotiate a lower rate. If there’s another cable provider in your area, you’ve got leverage.

Drop the gym membership

It’s summer — get your exercise outdoors. “Jogging, hiking, and climbing outside is free,” Blackwelder points out.

Already locked into an annual gym membership? Your club might be willing to drop your rate if you get a friend to join.

Downsize to a smaller, cheaper apartment

Depending on where you live, going from a one-bedroom apartment to a studio can help you save thousands of dollars each year in rent.

“You need to live modestly if you’re serious about saving for a down payment,” says Wright.

Reducing your living space can also lower your heating and air-conditioning bills.

Get a side gig

It’s age-old advice, but it’s now easier than ever to pick up a side job, thanks to work opportunities such as Uber, Lyft, and Postmates, a food delivery service.

“Nowadays all you need to make some extra money is a car,” says Blackwelder.

You can also pick up freelance work through services like TaskRabbit.com and AgentAnything.com.

Open a high-yield savings account

Instead of keeping your cash in a checking account where it’s not earning interest, move the money to a high-yield savings account.

“You get complete access to the money and daily accrual of interest,” says Blackwelder.

Get a cash rewards credit card

Set aside your no-frills credit card and get a card with great cash-back rewards. Beverly Harzog, an independent credit card expert and consumer advocate, recommends the Blue Cash Preferred American Express Card, the Chase Freedom Credit Card, or the Citi Double Cash Card.

Caveat: Rewards credit cards typically have higher interest rates, so make sure you pay off your balance in full — and on time — each month.

Save your tax refund

While it’s tempting to spend what Uncle Sam gives you back each year, exert some willpower and put the money toward your down payment instead.

Unload your “stuff” locally…

Summer is peak season for throwing a good old-fashioned yard sale. Get the word out by promoting it on Craigslist, and posting signs in the neighborhood several days in advance.

Just be sure to consider the weather report before deciding what day you’re going to hold it. (Clear skies and comfortable temperatures lead to better turnout.)

… And online

Think there’s a niche market for some of your items? You’re probably better off selling them on eBay. Large pieces of furniture, meanwhile, tend to sell well on Craigslist.

Posted by Daniel Bortz on Zillow