Homeownership boom widens the wealth gap

A Profile on the Wealth and Financial Well-Being of Renter Households highlights that renters today have a median net worth of just $10,400—a mere fraction of homeowners’ nearly $400,000 median net worth. According to the Aspen Institute Financial Security Program’s report, “From Rent to Riches,” the disparity is not solely due to home equity. While home equity makes up $200,000 of homeowners’ median net worth, the remainder comes from other assets that renters typically do not own, such as stocks, bonds, retirement accounts, and business equity. The report notes that 78% of homeowners own a potentially appreciating asset beyond their primary residence, compared to only 48% of renters.Just 39% of renter households have income exceeding their monthly expenses, compared to 54% of homeowners. The limited cash flow makes it difficult for renters to save, pay off debt, and invest in assets that can build wealth.Renters saw a 43% increase in net worth between 2019 and 2022, outpacing the 34% increase for homeowners. Pandemic-era support measures helped to spur the growth, allowing many renters to reduce debt and invest some of their earnings, researchers said.However, the end of support programs and rising housing costs reversed those gains.Rent prices surged by 27%...