Home ownership is one of the best ways for Americans to build wealth. In a sense, owning a home is like having a forced savings mechanism that should build as your home appreciates. Three common ways that home ownership can build wealth are as follows:
- The value of your home may appreciate, adding to your net worth and future resale value.
- Owning a home allows you to build equity versus paying rent, where you don’t gain ownership of any kind.
- Home ownership makes you eligible for mortgage interest deductions and other tax deductions.
2 of 3 Florida mortgage holders have 50%+ equity
Roughly 32.5% of homeowners in Florida do not have a mortgage. Although home price increases have slowed in Florida, they certainly have not stopped. With this said, a recent analysis from ATTOM Data Solutions showed that of the remaining Florida homeowners that have a mortgage, 62.8% owe lenders less than 50% of market value. To put this number into perspective, approximately 48.5% of homeowners owe less than 50% of market value at the national level. Needless to say, The Sunshine State has significantly more homeowners that are equity-rich.
Top 5 equity-rich states
- 1. Vermont (75.9%)
- 2. Idaho (65.8%)
- 3. Arizona (63.4%)
- 4. Florida (62.8%)
- 5. Utah (62%)
While these findings are not surprising, they are still encouraging for Florida homeowners. Given the popularity of The Sunshine State, it is not surprising that Florida home equity is some of the strongest seen across the country. Although home ownership may not be a goal for every American, it is certainly a good strategy for building wealth. It should be noted that these positive results are not only limited to your primary residence. In fact, owning income-producing properties is one of the best strategies to build wealth over time.
Are you ready to build your real estate investment portfolio in South Florida? We can help. Contact Natasha at Live South Florida Realty, Inc. today! Don’t forget to download the free Florida Home Search app either. This app is the most up-to-date and comprehensive MLS app for the South Florida market.