Homeownership is the largest source of wealth among households. Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan.

NAR calculated the gains in housing wealth (equity) over a 5, 10, 15, and 30 year holding period using NAR’s median existing home price data, assuming a 10 percent down payment and a 30-year fixed rate mortgage. These calculations are illustrative of the magnitude of the wealth gains over time. Actual wealth gains will vary by property and type of financing.

Nationally, most of the wealth gains accrue from the appreciation in home values. As of 2020 Q2, a homeowner who purchased a single-family existing home five years ago (2015 Q2) gained $81,488 in wealth (equity), of which $61,600, or 75% was from the home price appreciation. Homeowners typically stay in their home for 10 years, so a homeowner who bought a home 10 years ago (2010 Q2) would have $144,490 in home equity gains. Over a 30-year period, the total home equity gain is $283,022. As of 2020 Q2, the annual home price growth over a 30-year period is 3.7%.

 Download the .pdf reports for 181 metropolitan statistical areas.

Line graph/bar chart: Wealth Gains, Typical Single-Family Home 5, 10, 15, and 30 Years Ago

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