Owning a home is one of the most powerful ways to build wealth.
According to research, the median net worth of homeowners is a staggering $396,200, compared to just $10,400 for renters.
But for many Americans, financial literacy gaps create barriers to achieving homeownership.
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Lets explore the data and insights on how financial knowledge or the lack of it affects homeownership, and what we can do to bridge the gap.
The Wealth Gap: Why Homeownership Matters
Homeownership is more than just a roof over your head its the cornerstone of wealth-building.
The data reveals that owning a home can increase your net worth nearly 40 times over renting.
Despite this, only 32% of buyers are first-timers, well below the historic norm of 40%.
Rising home prices, interest rates, and low inventory create hurdles, but financial literacy could be the key to overcoming them.
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The Financial Literacy Gap: What the Numbers Show
More than half of Americans have never received formal education on financial literacy, including the benefits of homeownership.
Only 21% of respondents said they learned about real estate in high school, and 32% in college.
This gap is even more pronounced among certain racial and ethnic groups, where awareness of loan programs is limited, creating additional barriers to entry.
Hidden Opportunities: Loan Programs You Need to Know
FHA, VA, and low down payment programs can make homeownership more accessible, yet many prospective buyers don't understand these options.
A significant portion of respondents across all racial groups had not applied for down payment assistance programs simply because they weren't aware of them or didn't fully understand how they work.
How People Learn About Homeownership
When formal education isn't available, people turn to personal experiences and family for guidance. The most common sources of financial literacy include:
- 47% learned from personal experience as homeowners.
- 46% turned to the internet.
- 41% cited parents as a key resource.
- 38% relied on friends for advice.
Interestingly, Gen Z is the most likely to learn from parents, while Baby Boomers primarily rely on their own experiences.
Bridging the Knowledge Gap
Financial literacy and awareness can help close the racial and generational gaps in homeownership.
By increasing education on the benefits of real estate and highlighting accessible loan programs, we can empower more Americans to achieve the dream of owning a home.
Take the Next Step
Understanding the financial side of homeownership is the first step to building wealth.
Explore the resources and programs available to see how they can work for you.
Verify Your Home Purchase EligibilityWith over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.
About Editor - Ryan Skerritt
Ryan Skerritt has over 10+ years of experience in the residential financing space. With over two hundred and fifty million of funded loan volume, Ryan has the skill set to help any homebuyer configure the perfect mortgage plan.
