The wealth gap widens between home owners and renters

Increasing gap in wealth renters vs home ownersAs you can see from the graphic prepared by the NAR (National Association of Realtors), based on a survey completed by the Federal Reserve, home owners have always had a significantly higher net worth (between 31% – 46% ) than renters. This gap has been widening since the start of the economic recovery in 2010, while renters have actually seen their net worth decrease.

Of course, most of this is due to the equity that has been accumulating in their homes. This spread is forecast to continue to widen over the next few years as rents continue to rise, while home owner payments remain relatively stable. The forecast for 2016 is that home prices and values will continue to rise which will add more to home owners’ net worth and wealth.

At the same time, increasing rents will eat away more and more at individual’s wealth.

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