Trying to decide between renting or buying a home? One key factor that could help you choose is just how much homeownership can grow your net worth.

Every three years, the Federal Reserve Board shares a report called the Survey of Consumer Finances (SCF). It shows how much wealth homeowners and renters have, and the difference is significant.

On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. Check out the graph below to see the difference for yourself:

Why Homeowner Wealth Is So High

In the previous version of that report, the average homeowner’s net worth was about $255,000, while the average renter’s was just $6,300. That’s still a big gap. But in the most recent update, the spread got even bigger as homeowner wealth grew even more (see graph below):

As the SCF report says:

“. . . the 2019 to 2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”

One Big Reason: Home Equity

One big reason why homeowner wealth has grown so much is home equity.

Equity is the difference between your home’s value and what you owe on your mortgage. You build equity over time as you pay down your loan and as home values increase.

Over the past few years, home prices have risen significantly due to limited supply and strong demand. That imbalance pushed prices higher, which translated into faster equity gains and increased net worth for homeowners.

If you’re still weighing renting versus buying, here’s what matters. Even though inventory has improved, supply is still tight in many markets. That’s why forecasts call for continued price growth, just at a more moderate pace.

That means there is still opportunity to build equity if you buy now. As Ksenia Potapov, Economist at First American, explains:

“Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”

Of course, prices and inventory vary by location. That’s why working with a local real estate expert matters. They can break down what’s happening in your market and help you evaluate both the financial and lifestyle benefits of owning a home.

As Bankrate explains:

“Deciding between renting and buying isn’t just about cost. It also involves long-term financial strategy and personal circumstances. If you’re unsure, working with a local real estate agent can help you make a more informed decision.”

Bottom Line

If you’re unsure whether to rent or buy, remember that owning a home can significantly grow your wealth over time if the numbers make sense for you.

And if homeownership feels out of reach, let’s connect so we can explore programs that may make buying possible.