What Are the Differences Between Home Owner and Renter Wealth?

Homeownership plays an integral role in a household’s accumulation of wealth. Households who own a primary residence build primary residence equity, while renters have zero residence equity.

In the third quarter of 2023, CoreLogic’s home owner report analysis detailed that U.S. home owners with mortgages have seen their equity increase by a total of $1.1 trillion, a gain of 6.8% from the same period in 2022. In addition to primary residence equity, households who own a primary residence almost always own other assets as well.

Assets

In 2022, while almost every family owned some assets, home owners own the vast majority of assets in aggregate. An analysis of the Survey of Consumer Finances (SCF) suggests that the households who owned a primary residence own most other assets in sum, such as other residential real estate, vehicles, other non-financial assets, business interests, stocks and bonds, retirement accounts, and other financial assets.

In aggregate, home owners owned 16 times more stocks and bonds than renters, and 15 times more business interests and retirement accounts than renters. More than half of renters owned other financial assets, but they did not accumulate as they aged.

Debt

On the debt side of home owners’ balance sheets, the value of the primary home mortgage debt was the largest liability faced by home owners. However, the median value of mortgage debt declined between the 35 to 64 age categories. More than half of home owners above the age of 65 did not have mortgage debt (nor a balance on any of the other major debt categories).

For renters, the value of credit card and installment debt was the largest liability in their debt category. The median value of credit card and installment debt declined between the 35 to 64 age categories and was zero for renters aged 65 or older.

Net Worth

Net worth, the measure of households’ wealth, is the difference between families’ assets and liabilities. An analysis of the 2022 SCF found that home owners had a median net worth of $396,000, while renters had the median net worth of just $10,400.

NAHB Director of Forecasting and Analysis Jing Fu provides more detailed analysis, including breakdowns for each category by age group, in this Eye on Housing post.