Building Wealth Where You Live
The wealth gap between homeowners and renters in the U.S. has never been wider.
The typical homeowner now has a net worth that’s 43 times greater than that of the average renter, according to an analysis of federal data by the National Association of Realtors. Net worth is a measure of total wealth that looks at the value of assets (such as homes) and liabilities (such as debts).
A recent report from the Aspen Institute highlights the gaping wealth chasm that has formed between homeowners and renters in America. The median homeowner in America has a net worth of $400,000 as of 2022, the most recent data available, while the median renter’s net worth is just $10,400, according to the report. That means the typical homeowner has almost 40 times as much wealth as the typical renter.
Since before the pandemic, the net worths of both homeowners and renters have seen considerable gains. But as the net worths of both groups have grown, so has the wealth gap.
Comparing 2019 to today, renters have grown their wealth by 37%, while homeowners got about 46% wealthier. Zooming into 2022 tells a different story. Between then and now, renters’ wealth has actually shrunk by 3.8% — down from $10,400 — while the net worth of homeowners grew 8.5% — up from $396,200.
Homeownership has long been viewed as one of the most powerful tools for building wealth in the United States. As homeowners make mortgage payments, they steadily increase their equity, and over time their property may rise in value, further strengthening their financial position.
Experts see the findings of the organization’s recent report were striking. The data underscores just how significantly homeowners outpace renters when it comes to overall wealth accumulation.
Drawing primarily from the Federal Reserve’s Survey of Consumer Finances and the Survey of Household Economics and Decision making, the report found that renters — who account for more than one-third of U.S. households — face financial disadvantages across every income level. Compared to homeowners, renters tend to have weaker cash flow, heavier debt burdens, and smaller savings cushions. They are also more likely to carry student loan debt.
Many experts emphasize that homeownership itself plays a central role in generating wealth. Without owning property, individuals miss out on the equity growth and appreciation that can significantly boost net worth. Instead, renters continue to allocate a substantial portion of their income toward housing costs each year, while the long-term financial benefits of rising property values accrue to the property owner rather than the tenant.
Owning a home is one of the most powerful ways individuals and families build long-term wealth in the United States. Unlike renting—where monthly payments go directly to a landlord—each mortgage payment you make as a homeowner helps reduce your loan balance and increase your equity. Over time, as property values appreciate, that equity can grow substantially, creating a valuable financial asset.
According to the Federal Reserve, homeowners consistently have significantly higher net worth than renters, largely because of home equity accumulation. Real estate also tends to appreciate over the long term, historically outpacing inflation in many markets. This means your home not only serves as a place to live, but also as a hedge against rising costs.
Homeownership can also provide tax advantages, such as potential deductions for mortgage interest and property taxes (depending on your situation), and it offers stability in housing costs with a fixed-rate mortgage. Additionally, as you pay down your loan and your home increases in value, you create borrowing power that can be leveraged for renovations, education expenses, or investment opportunities.
Beyond the financial benefits, owning a home builds intangible wealth as well—community ties, stability, and pride of ownership. But from a purely financial standpoint, homeownership remains one of the most reliable pathways to building generational wealth over time.
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