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As a top mortgage lender in Portland, we at Primary Residential Mortgage are proud of the way we help our clients get into a new home with the best deal possible. There are so many advantages to homeownership, and we want to help you and your family experience these.

One such advantage? The financial one. A home serves as more than just extra space – it’s an investment, and it pays off for many Americans. Two recent studies showed how homeowners hugely outpace renters in terms of net worth and returns on investment; let’s look at the results of these studies, and how to interpret these numbers.

Basic Numbers

According to the US Census Bureau, as of December 2013, the median net worth of homeowners in the US was $199,557. The net worth of households renting their home, on the other hand, was just $2,208 – 90 times less. The economy has rebounded significantly since this time, and it’s likely homeowner net worth is even higher now.

In a similar study, these findings were essentially confirmed. The Federal Reserve found that between 2010 and 2013, the gap between homeowner and renter net wealth increased from a difference of $182,000 to a difference of over $220,000.

How Homes Pay Off

Now, we do have to account for the fact that in many cases, homeowners were wealthier in the first place, which allowed them to purchase their home to begin with. But we also have to consider that most of these homeowners are entering into debt with a home loan – the difference is, this debt is an investment, unlike personal loans or credit card interest.

Since home prices are rising faster than interest on a standard home loan, owners can expect to sell for a solid profit after paying off their loan. Even before this point, they’re still contributing money to an equity fund that’s tax-advantaged due to tax breaks on mortgage interest. Renters are accumulating none of this equity, and without any kind of future investment.

For more on why owning a home is preferable to renting, or to find out about any of our mortgage services, speak to the pros at Primary Residential Mortgage today.

*The views and opinions expressed are my own and do not necessarily represent the official policy or position of Primary Residential Mortgage, Inc.