Household Wealth in Residential Real Estate Continues to Reach New Heights

In spite of what you might read or hear, the housing market is on solid footing. Mortgage delinquencies are at near-year historical lows. And, the median price for all housing types across the nation in March was up 2.7% from one year ago. Plus, all four U.S. regions registered price increases. Unsold inventory sits at a 4.0-month supply at the current sales pace, indicating a balanced market.

According to Lawrence Yun, the Chief Economist for the National Association of Realtors, “In a stark contrast to the stock and bond markets, household wealth in residential real estate continues to reach new heights.”

It’s really no surprise that household wealth in residential real estate continues to rise. After all, real estate builds wealth through property appreciation, rental income generation, and through leveraging debt to increase returns. These factors, combined with tax benefits and the ability to build equity, make real estate a potent wealth-building tool. 

Granted, real estate may not be as liquid as stocks and may require more money and time, but real estate typically offers lower risks and better returns than stocks. And, most importantly, real estate creates wealth.

When you own real estate, you can leverage it to increase returns, such as through financing and refinancing. Investing in real estate can also provide a hedge against inflation, as property values tend to rise with increasing inflation.

Real estate has long been heralded as a critical pillar of wealth creation. It is a tangible investment avenue and its potential for consistent appreciation and income generation makes it an excellent wealth-building tool.   

Suffice it to say that if you buy smart and manage your risks, the long-term reward of investing in real estate is hard to beat.