New NAR Study Investigates Wealth Gains Over a Decade Via Homeownership

Owning a home has long been considered part of the American Dream. Aspirations to own one’s own home spring from a variety of motivations, but one common thread over time is homeownership’s ability to provide long-term wealth to Americans. Not only do we accumulate equity over time by owning real estate, but homes typically increase in value over time as price appreciation occurs. A new study by NAR, the National Association of Realtors, highlights the wealth gains that homeownership has provided in the last ten years, as well as a breakdown of which areas in the country and groups of populations benefited the most.

From 2010 to 2020, total housing wealth gains for Americans totaled $8.2 trillion, largely as a result of housing appreciation. NAR’s study focused on the impact of homeownership on middle-income Americans. “Middle-income” is defined in the study as a homeowner earning between 80%-200% of the median income of a particular area. 

Using data collected, NAR determined that an owner who bought a property in 2010 for around the median home price of $162,600 should have accrued more than $229,000 in housing wealth since then. 86% of this wealth is due to appreciation, with housing prices rising steadily at a rate of 8.3% per year from 2011 to 2021. During the same period, the United States saw nearly 1 million new middle income households turn into homeowners. Of the total $8.2 trillion in wealth gains, just $2.1 trillion, or 21% of the total gains, came at the benefit of middle-income homeowners. The majority of the gains - 71% in fact - were received by upper-income Americans.

Since the Great Recession of 2008, homeownership rates have decreased among all demographics of the population, with the largest rate of decline seen in middle-income Americans. In fact, the percentage of homeownership seen in middle-income households has fallen from 78% to just 69%. The rising home values, however, help to account for the increase in housing wealth seen over the same time period. NAR’s chief economist, Lawrence Yun, anticipates wealth gains for middle-income Americans to keep thriving due to migration patterns, job growth, and escalating home prices.

In the Florida Keys real estate market, home price appreciation is skyrocketing. With limited properties and bans on building, prices are expected to continue to appreciate at a record pace, making it a great time to purchase a home in the Florida Keys!