Homeowners across the board are feeling richer from rising home prices, but the wealthiest have enjoyed the largest gain, according to a report from the National Association of REALTORS®.
From 2010 to 2020, about 71% of the increase in housing wealth was in high-income households. Low- and middle-income households received a smaller share of housing wealth gains, according to the NAR report. Low-income homeowners comprise a smaller share of homeowners overall, while high-income homeowners make up the largest segment of owners.
Over the last decade, the housing value gap between households earning more than 200% of an area’s median income and those earning less has significantly widened, according to NAR’s report. High-income homeowners held 28% of all U.S. housing wealth in 2010, but by 2020, that percentage had grown to 42.6%.
“It’s a wake-up call,” Gay Cororaton, NAR’s senior economist and director of housing and commercial research, told The Wall Street Journal. “Policies have to be focused more on making sure that the lower-income and many more middle-income folks participate in the benefit of homeownership.”
Long-term homeownership has been shown to build wealth for households. The median homeowner realized $254,900 in wealth in 2019 compared to $6,270 for the median renter, according to the Federal Reserve’s Survey of Consumer Finances, as reported by The Wall Street Journal.