Is Homeownership Still The Best Strategy for Long-Term Wealth and Security?

For many first-time buyers, two questions take center stage: “How much does the home cost?” and “What will my monthly payment be?”
That focus makes perfect sense—affordability is a major factor when purchasing a home, especially as prices continue to rise nationwide. But there’s another critical piece of the puzzle that often gets overlooked: the home’s future value.

Most buyers have at least thought about equity, especially if the idea of paying a landlord’s mortgage instead of building your own wealth has started to wear thin. So let’s dig into why appreciation matters—and how it can impact your long-term financial picture.

Understanding Appreciation

Home price appreciation—how properties gain value over time—plays a major role in long-term wealth building. As Forbes explains, it’s the reason some homeowners end up with dramatic financial gains when they sell. While real estate prices naturally rise and fall, history shows that long-term values have consistently moved upward.

That reliability is a big reason real estate is considered one of the more stable long-term investment options. A study from economists at UC Davis, the University of Bonn, and Germany’s central bank analyzed returns on multiple asset classes—from government bonds to equities to housing—across 16 developed countries from 1870 to 2015. Their conclusion?

Inflation-adjusted housing returns averaged just over 7%, slightly higher than equities at just under 7%, with significantly less risk.
In fact, housing was found to be about half as volatile as stocks and even steadier than bonds.

While investors certainly pay attention to statistics like these, they’re just as valuable for everyday homebuyers who want to secure long-term financial stability.

Strengthening Your Financial Future

One of the biggest advantages of homeownership is what happens later in life. Paying off a mortgage during your working years removes a major monthly expense in retirement. For many retirees—especially those relying on Social Security or retirement account withdrawals—this can mean the difference between financial comfort and financial stress.

It might feel strange to think decades ahead when you’re only beginning your homebuying journey, but building long-term security starts with decisions you make early.

Built-In Savings

If saving money has never come naturally, a mortgage can function as a “forced savings plan.” Each payment you make increases your equity—something renting can never provide. While owning a home isn’t a magic formula for wealth and doesn’t replace responsible financial habits, it does create a solid structure that helps many homeowners build net worth over time.

Why Buying Early Matters

The earlier you purchase a home, the more time you have to benefit from appreciation and equity growth. Research from the Urban Institute shows just how powerful this can be:

• Buyers who purchased their first home between ages 25 and 34 built a median of $150,000 in housing wealth by their 60s.
• Those who bought later, at ages 35 to 44, accumulated about $76,000.
• Buyers who waited until after 45 saw median housing wealth of roughly $44,000.

The takeaway? The choices you make today—especially when it comes to homeownership—can significantly shape your financial future.

Source: Realty Times

Peter Pescatore

Experienced Chief Operating Officer with a 26 + year demonstrated history of working in the banking industry. Skilled in all aspects of the residential mortgage market . Strong business development professional with a Bachelor of Science (BS) focused in Business Administration and Management, from St. Joseph College. A direct endorsement underwriter and a licensed Mortgage Loan Originator.

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