The median net worth of homeowners crushes that of renters, according to a study by the Joint Center for Housing Studies at Harvard University. Authors concluded that in 2013, the median net worth of homeowners totaled $195,400 while the net worth of renters totaled just $5,400.
There are several reasons for this. Homeowners must set aside money each month to save for a down payment, usually 20 percent of the cost of the home. And once they're in, they must pay the monthly principal and interest, some of which comes back to them when the house sells, and some of which is tax deductible each year. Renters on the other hand, lack the incentive or ability to "invest" in their residence once the monthly rent is paid, according to the study.
The Harvard study concludes the federal government should push for ways to make homeownership more affordable, by protecting the Dodd-Frank law that protects consumers in real estate transactions, and by encouraging companies to increase employment and income.
The number of owner-occupied homes remains at 64.3 percent, down from the peak of 70 percent in 2004.
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