Homeownership accounts for 90% of total wealth, according to data from the 2019 Survey of Consumer Finance. Owners in areas with rapid price appreciation are filling their pockets the fastest. “Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation,” Scholastica “Gay” Cororaton, a research economist at the National Association of REALTORS®, writes on the association’s Economists’ Outlook blog. “And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing-home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,000.”
People who purchased a home 30 years ago would typically have gained an average of $283,000 as of the second quarter of 2020, according to NAR.
Ninety percent of the metro areas with the largest housing wealth gains over a 10-year period were on the West Coast. The 10 metros with the largest wealth gains in the past decade are:
- San Jose-Sunnyvale-Santa Clara, Calif.
- San Francisco-Oakland-Hayward, Calif.
- Anaheim-Santa Ana-Irvine, Calif.
- San Diego-Carlsbad, Calif.
- Los-Angeles-Long Beach-Glendale, Calif.
- Seattle-Tacoma-Bellevue, Wash.
- Boulder, Colo.
- Honolulu
- Denver-Aurora-Lakewood, Colo.
- Naples-Immokalee-Marco Island, Fla.
Source: “Metro Area Wealth Gains From Homeownership as of 2020 Q2,” National Association of REALTORS®’ Economist Outlook blog (Oct. 30, 2020)
