Homeownership continues to prove it can pay off over the long term. It is the largest source of wealth among most families, and it’s been paying back more lately.
Equity gains are increasing, making homeownership even more profitable: A homeowner who purchased a single-family existing home 10 years ago would have gained $225,000 in home equity if they sold at the median sales price of $363,100 in the third quarter of 2021, Gay Cororaton, a National Association of REALTOR® research economist, says on the association’s Economists’ Outlook blog.
Homeowners typically stay in their homes for 10 years. For reference, about a decade ago, the median sales price of a home was $169,000, according to NAR data. The gains in home equity come from paying down the mortgage and from appreciation in home prices, Cororaton says.
“The past five years have seen increasingly rapid price appreciation,” Cororaton says.
A homeowner who purchased a typical home five years ago has accumulated an average of $144,400 in home equity, according to NAR data.