There are many benefits to owning your own home, including housing and payment stability, freedom to modify and create the home to your own tastes and preferences, higher community involvement. Perhaps one of the most important benefits is the effect on your net worth over time.
Here is valuable information for you to consider as you plan for your future and think about whether to purchase a home or rent, and how that will affect your long term net worth. Much of the data reflects national numbers, but the concepts apply in California and specifically the Bay Area. In fact, due to our higher price points, increases in home equity result in much higher actual dollars added to personal net worth.
This article from Market Watch explains in detail why Homeownership is still financially better than renting.
This Federal Reserve Bulletin from 2017 includes extended analysis of incomes and other statistics. Importantly, page 13 shows the stark difference between median and mean net worths of Owners vs. Renters (see Housing Status section). In 2016, the median net worth of renters was $5,200, while the median net worth of home owners was over $230,000. This data is hard to ignore.
Here’s another interesting article from earnest.com titled Build Wealth Beyond Homeownership. This site has other intriguing articles to read as well.
I trust you will find this information valuable, and I’m happy to discuss with you further as you determine the best path forward to meet your own important financial goals.