According to recent data from the National Association of Realtors (NAR), homeowners in the middle-income bracket across the United States have accumulated a median wealth of $122,070 from home appreciation in the last ten years.
The National Association of Realtors (NAR) recently released a report titled “Wealth Gains by Income and Racial/Ethnic Group”, which indicates that middle-income homeowners, earning between 80% and 200% of the median income in their area, experienced a 68% increase in property values from 2012 to 2022. The report also highlights that homeowners from all income groups benefitted from homeownership over the last decade, with low-income households accruing a median of $98,910 and upper-income households gaining $150,810.
Among the top 10 regions with the highest rates of homeownership for middle-income households, the average gain for owners was $110,000 over the last decade. However, this number varies significantly depending on the location. As an example, homeowners in Ogden, Utah, where 85% of middle-income households own homes, gained an average of almost $220,000 in wealth from home appreciation during that time.
In metropolitan regions with the highest rates of homeownership for low-income households, the average gain for homeowners was $140,000 over the past decade. However, this figure varies significantly based on geographic location. For instance, in Prescott, Arizona, where 68% of low-income households own homes, homeowners accumulated an average gain of approximately $200,000 during the same period due to the growth in home values.
According to the NAR report, Black homeowners experienced the smallest wealth gains from the growth in home values over the past decade, with an average gain of approximately $115,000. However, the report also highlighted the metropolitan areas where Black homeowners saw the most significant growth in wealth. These regions include Bremerton, Washington; Santa Maria, California; Lake Havasu City, Arizona; and Provo, Utah, where this demographic accumulated a median wealth of over $500,000 since 2012.
In addition to the wealth gains, homeowners experienced a significant reduction in debt over the last decade. The report reveals that homeowners witnessed a 21% decrease in debt. Lawrence Yun pointed out that some homeowners who refinanced their mortgage to a rate below 4% during the COVID-19 pandemic may have even paid off a more substantial portion of their mortgage.