How Homeownership Affects Household Wealth

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Posted To: MND NewsWire

It is conventional wisdom that homeownership is key to household wealth , and the National Association of Home Builders makes a convincing argument for that theory in its Eye on Housing blog. Jing Fu used data from the Federal Reserve’s 2016 Survey of Consumer Finances (SCF) to show that, not only does equity in a home constitute the largest component of aggregate wealth nationwide, but it has a strong correlation with other sources of wealth on an individual basis. The $24.2 trillion aggregate worth of primary residences constitutes about a quarter of all wealth on the balance sheets of households, surpassing “other financial assets” which include loans to someone else, future proceeds, royalties, futures, non-public stock, deferred compensation, oil/gas/mineral investments, and cash, a category…(read more)

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