Homeownership presents a great pathway to build wealth. Among all families, the ownership of a primary residence typically accounts for 90% of total wealth, based on the 2019 Survey of Consumer Finance data. Among those in the bottom 20% of the income percentile, the median value of holdings for a primary residence accounts for 99% of total family assets, but only 42% for families in the top 10% of the income bracket.

Table: Total Family Assets by Percentile of Income

Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation. And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,00.

Wealth Gains by Metro Areas as of 2020 Q2

Nationally, a person who purchased a typical home 30 years ago would have typically gained about $283,000 as of the second quarter of 2020. Of the total wealth gain, 67% or $192,600 is from the price appreciation of 3.7% annually. Over a 10-year period, the wealth accumulation is $144,490, of which $114,233 or 80% are from the price appreciation.

Nine of the top 10 metro areas with the largest housing wealth gains over a 10-year period were on the West Coast: San Jose-Sunnyvale-Sta. Clara; San Francisco-Oakland-Hayward; Anaheim-Sta. Ana-Irvine; San Diego-Carlsbad; Los-Angeles-Long Beach-Glendale; Seattle-Tacoma-Bellevue; Boulder, Colorado; Urban Honolulu, Hawaii; and Denver-Aurora Lakewood, Colorado. Naples-Immokalee-Marco Island rounds out the tenth.

However, in terms of the home price appreciation and the rate of return (price appreciation less mortgage rate), the top metro areas are Cape Coral Fort-Myers, Florida; Grand Rapids, Michigan; Boise-City-Nampa, Idaho; Reno, Nevada; Port-St. Lucie, Florida; Las Vegas-Henderson-Paradise, Nevada; San Jose-Sunnyvale-Sta. Clara; Riverside-San Bernardino, California; Phoenix-Mesa-Scottsdale, Arizona; and Lakeland-Winter-Haven, Florida. 

Use the data visualization below to find out the wealth gains from homeownership in selected metro areas:

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