Renters Missed Out On 51HUGE Gains Of Equity This Past Year

Dated: November 1 2021

Views: 21


Renters Missed Out on $51,500 This Past Year


Rents have increased significantly this year. The latest National Rent Report from Apartmentlist.com shows rents are rising at a rate much higher than the three years leading up to the pandemic:

“Since January of this year, the national median rent has increased by a staggering 16.4 percent. To put that in context, rent growth from January to September averaged just 3.4 percent in the pre-pandemic years from 2017-2019.”

Looking back, we can see rents rising isn’t new. The median rental price has increased consistently over the past 33 years (see graph below):Renters Missed Out on $51,500 This Past Year | Keeping Current MattersIf you’re thinking of renting for another year, consider that rents will likely be even higher next year. But that alone doesn’t paint the picture of the true cost of renting.

The Money Renters Stand To Lose This Year

A homeowner’s monthly mortgage payment pays for their shelter, but it also acts as an investment. That investment grows in the form of equity as a homeowner makes their mortgage payment each month to pay down what they owe on their home loan. Their equity gets an additional boost from home price appreciation, which is at near-record levels this year.

The latest Homeowner Equity Insights report from CoreLogic found homeowners gained significant wealth through their home equity this past year. The research shows:

“. . . the average homeowner gained approximately $51,500 in equity during the past year.”

As a renter, you don’t get the same benefit. Your rent payment only covers the cost of shelter and any included amenities. None of your monthly rent payments come back to you as an investment. That means, by renting this year, you likely paid more in rent than you did in the previous year, and you also missed out on the potential wealth gain of $51,500 you could have had by owning your own home.

Bottom Line 

When deciding whether you should rent or buy in the future, keep in mind how much renting can cost you. Another year of renting is another year you’ll pay rising rents and miss out on building your wealth through home equity. Connect with us today to talk more about the benefits of buying over renting.

Latest Blog Posts

Renters Missed Out On 51HUGE Gains Of Equity This Past Year

Rents have increased significantly this year. The latest National Rent Report from Apartmentlist.com shows rents are rising at a rate much higher than the three years leading up

Read More

How To Sell An Inherited House

The passing of a loved one is a somber time, and working through the departed’s last will and testament can be stressful. This is especially true if a home is part of the inheritance.If you do

Read More

What Will Mortgage Rates Look Like Through 2021 Wait Or Buy Now

With mortgage interest rates hitting record lows so many times recently, some are wondering if we’ll see low rates continue throughout 2021, or if they’ll start to rise. Recently, 

Read More

Will Forbearance Plans Lead To A Foreclosure Wave

At the onset of the economic disruptions caused by the COVID pandemic, the government quickly put into place forbearance plans to allow homeowners to remain in their homes without making their

Read More