Why Homeowners Build 43x More Wealth Than Renters (Teach Your Clients This!)

Hey guys, is it better to be a renter or a homeowner in today’s world? Especially with the rise of digital nomads and people wanting maximum flexibility—being able to live anywhere and work from anywhere.

There’s a strong attraction for that lifestyle, especially for Gen Z. Some in real estate worry: “Will Gen Z still buy homes like Gen X did?”

The reality is in the numbers, and we need to educate them.

Here’s a stark comparison: the average homeowner has 43 times the net worth of the average renter.

Average renter: ~$10,000 net worth

Average homeowner: ~$430,000 net worth

The reasons are many, but the number one factor is leverage.

Let me give you an example. The Wall Street Journal recently published an article comparing real estate to the stock market. They said if you had invested in the S&P 500 over the last 30 years instead of buying a house, you would have made more money.

That’s misleading, because they ignored leverage. Let’s break it down:

Imagine someone gives you $40,000 and you have two choices: invest it in real estate or in the stock market.

If you put it in the stock market and earn 10% in a year, you make $4,000. That’s good, and you can keep compounding it over time.

Now, take that same $40,000 and put it down as 10% on a $400,000 house.

If the housing market goes up 10%, that $400,000 house is now worth $440,000.

Your $40,000 investment just grew to $80,000.

That’s a 100% return on your initial investment, thanks to leverage.

The key difference is that in real estate, you’re leveraging your cash to control a much larger asset. You’re building wealth on a compounded basis, not just on cash alone.

We need to educate our audiences about this, especially young buyers. Owning a home is one of the fastest paths to wealth in America. It’s how you significantly increase net worth over time.

Just a couple things to think about today—share this with your audiences, educate them, and show them why homeownership matters.

Hope you’re having a great day, and good selling.
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