What Is the #1 Financial Benefit of Homeownership?
March 17, 2021
There are many financial and non-financial benefits of homeownership, and the greatest financial one is wealth creation. Homeownership has always been the first rung on the ladder that leads to forming household wealth. As Freddie Mac explains:
“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”
Odeta Kushi, Deputy Chief Economist at First American, also notes:
“The wealth-building power of homeownership shows that home is not only where your heart is, but also where your wealth is…For the majority of households that transition into homeownership, the most recent data reinforces that housing is one of the biggest positive drivers of wealth creation.”
Last week, CoreLogic released their latest Homeowner Equity Insights Report, which reveals the surge in wealth created over the last twelve months through increased home equity. The report makes five key points:
- Roughly 38% of all homes are mortgage-free
- The average equity gain of mortgaged homes in the last year was $26,300
- The current average equity of mortgaged homes is greater than $200,000
- There was a 16.9% increase in total homeowner equity
- Total homeowner equity reached over $1.5 trillion
Here’s a map that shows the equity gains by state:
Increasing equity is giving homeowners the power to better manage the challenges of the pandemic, especially for those spending more time at home. In the report, FrankNothaft, Chief Economist for CoreLogic, explains:
“This equity growth has enabled many families to finance home remodeling, such as adding an office or study, further contributing to last year’s record level in home improvement spending.”
The financial advantage homeowners have has not gone unnoticed. In the same report, Frank Martell, President and CEO of CoreLogic, states:
“This growing bank of personal wealth that homeownership affords was noticed by many but in particular for first-time buyers who want a piece of the cake.”
Increasing wealth benefits more than just homeowners.
Last year, the Rosen Consulting Group released a report outlining the benefits of homeownership. In that report, they explained what an increase in net worth – which they call the “wealth effect” – means to the economy:
“In economic literature, the wealth effect is a term used to describe the fact that individuals have a tendency to increase their spending habits when their actual or perceived wealth increases. For homeowners, the latent savings achieved by building equity in their home and the growth in home values over time both contribute to increased net worth. Through the wealth effect, this in turn translates to households having a greater ability and willingness to spend money across a wide range of other types of goods and services that spur business activity and provide a positive multiplier effect that creates jobs and income throughout the economy.”
Bottom Line
Homeownership builds wealth through equity, and this creates a positive impact for homeowners and their communities.
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Belmonte Builders was honored to receive six (6) awards on Thursday, November 13th at the 2025 Capital Region Builders & Remodelers Association’s (CRBRA) Best in Building Awards dinner. We were proud to be recognized for excellence in the following categories: Best New Construction Floor Plan 2,500+ sq. ft. (Lincoln Ranch) Best Aging-in-Place Design (Lincoln Ranch floor plan) Best New Merchandised (staged) Model (18 Dahlia Drive, Lincoln Ranch in Waite Meadows) Best New Kitchen - under $75,000 (18 Dahlia Drive, Lincoln Ranch in Waite Meadows) Best New Primary Bath - under $50,000 (18 Dahlia Drive, Lincoln Ranch in Waite Meadows) Best New Twin Home or Townhome (64 Daintree Drive, Willow Primary Up, Forest Grove) The CRBRA Best in Building Awards is the Capital Region’s premier award program recognizing creativity, ingenuity and advancement in residential building. Through the Best in Building Awards competition, CRBRA builders, remodelers and industry-related associate members enter their best projects from kitchens and baths to floor plans and home features.
Belmonte Builders' Lincoln floor plan at 18 Dahlia Drive had an outstanding showing at this year’s Saratoga Showcase of Homes, earning six awards including 1st place for in the Luxury Home Category : Winner: Best Interior Floor Plan Winner: Best Landscaping (partner - Dylan Helo, Heloscaping ) Runner Up: Exterior Architectural Design Runner Up: Kitchen (partner - Heather Lust, Curtis Lumber ) Runner Up: Primary Bath Runner Up: Interior Decorating (partner- Kaitlynn Johnson, Old Brick Furniture ) Together, these honors highlight Belmonte’s continued dedication to exceptional craftsmanship, thoughtful design, and the superior livability that defines every Belmonte home.
Belmonte Builders is proud to announce that our Willow Twin Home at 60 Daintree Drive was honored with six awards in the Classic Home category at this year’s Saratoga Showcase of Homes. The home earned top recognition for Best Exterior Architectural Design , Best Interior Decorating (partner - Denise Rappazzo, Plum & Crimson Fine Interior Design), Best Landscaping (in partnership with CPI Landscaping), and Best Workmanship , along with Runner-Up awards for Best Floor Plan and Best Kitchen (Michelle Mucciero, Builder’s Kitchens). Together, these honors celebrate the collaboration, craftsmanship, and attention to detail that define every Belmonte home. From architectural character and beautiful interiors to expert landscaping and fine finishes, 60 Daintree Drive embodies the thoughtful design and superior livability that have made Belmonte a trusted name in the Capital Region for more than 40 years.
Plans for Exciting New Amenities Unveiled
Talk about the economy is all over the news, and the odds of a recession are rising this year. That’s leaving a lot of people wondering what it means for the value of their home – and their buying power. Let’s take a look at some historical data to show what’s happened in the housing market during each recession, going all the way back to the 1980s. The facts may surprise you.
Think a new home means a bigger price tag? Not necessarily.
On November 14th, Belmonte Builders was honored to take home three(3) awards for our Cypress Twin Home at the 2024 Capital Region Builders & Remodelers Association’s (CRBRA) Best in Building Awards night. We were proud that our Cypress model home at 22 Daintree Drive was recognized for: Best New Twin Home or Townhome Best New Merchandised (staged) Model Best Aging in Place Design
Now that it’s September, all eyes are on the Federal Reserve (the Fed). The overwhelming expectation is that they’ll cut the Federal Funds Rate at their upcoming meeting, driven primarily by recent signs that inflation is cooling , and the job market is slowing down . Mark Zandi, Chief Economist at Moody’s Analytics, said : “They’re ready to cut, just as long as we don’t get an inflation surprise between now and September, which we won’t.” But what does this mean for the housing market, and more importantly, for you as a potential homebuyer or seller? Why a Federal Funds Rate Cut Matters The Federal Funds Rate is one of the key factors that influences mortgage rates – things like the economy, geopolitical uncertainty, and more also have an impact. When the Fed cuts the Federal Funds Rate, it signals what’s happening in the broader economy, and mortgage rates tend to respond. While a single rate cut might not lead to a dramatic drop in mortgage rates, it could contribute to the gradual decline that’s already happening. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), points out : “Once the Fed kicks off a rate-cutting cycle, we do expect that mortgage rates will move somewhat lower.” And any upcoming Federal Funds Rate cut likely won’t be a one-time event. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says : “Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely.” The Projected Impact on Mortgage Rates Here’s what experts in the industry project for mortgage rates through 2025. One contributing factor to this ongoing gradual decline is the anticipated cuts from the Fed. The graph below shows the latest forecasts from F annie Ma e , MBA , NAR , and Wells Fargo (see graph below):
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Retirement is a time for relaxation, adventure, and enjoying the things you love. As you imagine this exciting new chapter in your life, it's important to think about whether your current home still fits your needs. If it's too big, too costly, or just not convenient anymore, downsizing might help you make the most of your retirement years. To find out if a smaller, more manageable home might be the perfect fit for your new lifestyle, ask yourself these questions: Do the original reasons I bought my current house still stand, or have my needs changed since then? Do I really need and want the space I have right now, or could somewhere smaller be a better fit? What are my housing expenses right now, and how much do I want to try to save by downsizing? If you answered yes to any of these, consider the benefits that come with downsizing.
