How Owning a Home in Portand, Oregon, Washington and Idaho Can Really Increase Your Wealth

The Dramatic Impact of Homeownership on Net Worth

Are you living in Portland, the broader Oregon area, Washington, or Idaho and wondering whether to rent or buy a home this year, here’s a powerful insight that could give you the clarity and confidence you need to make your decision.

Every three years, the Federal Reserve releases the Survey of Consumer Finances (SCF), In regions like Portland, Oregon, Washington, and Idaho, homeowners often have a net worth that is substantially higher — almost 40 times greater than that of renters. This difference is particularly pronounced in our vibrant Northwest communities, where the real estate market has shown consistent growth. (see graph below):

One of the key reasons for this wealth gap is the value of owning a home in our region. As a homeowner As a homeowner in places like Portland, Seattle, or Boise, your equity increases as the local real estate market thrives and your home appreciates in value. Additionally, each mortgage payment you make is like investing in a long-term savings plan, contributing to your equity. This is a financial advantage that renting simply cannot match; as a renter, the monthly rent payments do not contribute to any form of personal wealth accumulation. As a renter, you’ll never see a financial return on the money you pay out in rent every month. Ksenia Potapov, Economist at First American, explains it like this:

“Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments . . .”

The Largest Part of Most Homeowner Net Worth Is Their Equity

Home equity does more to build the average household’s wealth than anything else. According to data from First American and the Federal Reserve, this holds true across different income levels (see graph below):

The green segment in each bar represents how much of a homeowner’s net worth comes from their home equity. Based on this data, it’s clear no matter what your income level is, owning a home can really boost your wealth. Nicole Bachaud, Senior Economist at Zillow, shares:

“The biggest asset most people are ever going to own is a home. Homeownership is really that financial key that helps unlock stability and wealth preservation across generations.”

If you’re ready to start building your net worth, the current real estate market offers several opportunities you should consider. For example, with mortgage rates trending lower lately, your purchasing power may be higher now than it has been in months. And, with more inventory coming to the market, there are more options for you to consider. A local real estate agent can walk you through the opportunities you have today and guide you through the process of finding your ideal home.

Bottom Line

If you’re unsure about whether to rent or buy a home, keep in mind that owning a home can increase your overall wealth in the long run, no matter your income. To discover more about this and the many other benefits of homeownership, let’s connect.