Key takeaways:
- Homeownership has always been the cornerstone of the American Dream—but it’s also a crucial step to building household wealth.
- Owning a home helps generate equity over time, which makes real estate a sound investment for anyone looking to secure their financial future.
- Still on the fence about buying in the Triangle? Contact Linda Craft & Team at 919-235-0007 to start exploring your options.
Here’s Why Building Equity Matters More Than You Think
For generations, owning a home has been considered the first step to achieving the American Dream. However, homeownership is also seen as a huge financial investment—and it’s often the easiest way to begin building wealth.
Want to start securing your financial future? Here’s how owning a home can get you on the path to success.
Owning a home generates equity over time
Even if you have to take out a mortgage to pay for your home, you’ll still increase your personal net worth over time thanks to equity. In real estate, home equity is the difference between the current market value of your house and the amount you currently owe on your loan.
When you pay your mortgage every month, those payments serve as a form of forced savings. And as the amount of equity you have in your home increases, your wealth will begin to skyrocket, too.
Homeownership offers more financial benefits than renting
Some may argue that renting is a cheaper alternative to homeownership. In the short-term, this may be true—but when you pay your landlord every month, that money stays in their pocket. Mortgage payments actually help you own more of your home, and you can cash out that earned equity whenever you go to sell.
Renters don’t always avoid some of the extra expenses that come with owning a home, such as property taxes and repairs. In fact, all of these fees are already rolled into your rent payment…along with a profit margin for your landlord.
There are different ways to cash in on your wealth
A recent study by CoreLogic reported that homeowners’ net worths are consistently higher than renters’ at every income level. Additionally, the average homeowner gained $17,000 in equity in just the last year alone.
If you own a house and want to take advantage of these significant gains, you have a few options. The most obvious one is selling your home, which allows you to cash in on the equity you’ve built up over time. For example, if you paid off a $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.
Don’t want to move quite yet? Refinancing your mortgage lets you secure a lower interest rate and take out some of the equity you’ve earned since you first bought your house. And when done responsibly, refinancing can even help you avoid foreclosure or reduce your monthly payment.
Bottom Line: Equity Is the Quickest Way to Build Wealth
As home prices continue appreciating at record levels, there’s never been a better time to be (or become!) a homeowner. If you’re ready to stop renting and start building equity, consider contacting a local real estate team to get the ball rolling on your move!
Already own a home? We’d be happy to tell you what it’s worth in today’s market with our free home valuation—just send over your address, and we’ll do the rest.
Only Trust the Triangle’s #1 Real Estate Team
Whether you’re buying or selling a home in the Triangle, you can always trust Linda Craft & Team to get the job done right. Contact us at 919-235-0007 to put our 350+ years of combined experience to work for you—we look forward to helping you every step of the way!