Did you know that homeownership unlocks multiple benefits including being a cornerstone to household wealth? The National Association of Home Builders (NAHB) recently published an article explaining how. Homeownership provides a roof over one’s head, creates a sellable asset, and offers the opportunity to build wealth through equity.  

In 2022, it was estimated that 66% of U.S. households owned their homes. For these families, the median net housing value increased from $139,000 in 2019 to $201,000 in 2022. This dramatic change is due to an increase in home prices and flat home mortgage debt.  

This data comes from the 2022 Survey of Consumer Finances (SCF) which is a cross-sectional survey that outlines the finances of U.S. households including observing individuals’ primary residences, age, education and other relevant categories. The SCF data is preferred over the quarterly Financial Accounts of the United States report because it takes a more personal look via family-level data. And homeownership plays a major role in that data. 

Primary residences continued to be a top asset on 2022 household balance sheets. In fact, primary residence comprised more than one-quarter of all assets, which surpassed business interests (20%), other financial assets (19%) and individual retirement accounts (15%). Primary residences are also beneficial nonfinancial assets.  

As outlined above, 66% of households in 2022 owned their primary residence. Over half of households (54%) put their money into retirement accounts and 21% owned stocks or bonds. 99% of households held other crucial financial assets including checking accounts and prepaid debit cards.  

Households also accumulate assets gradually as they age. Data showed that households under age 35 averaged about $7.6 trillion in total assets. Comparatively, households aged 65 or older averaged about $65.9 trillion. That is nine times larger than the under-35 age group. 

Another difference between generational wealth is the distribution of these assets. For households under age 65, primary residence took the top spot on the balance sheet. For households over age 65, other financial assets were more. Primary residences appeared second on the balance sheet for this age group. 

But there’s more. As aggregate home value increases with age, value as a share decreases. This decline is due to the growth of additional assets including stocks and bonds and retirement accounts.  

Further analysis of the data found that individuals with higher education are more likely to obtain higher value in their asset holdings. What does that mean? According to NAHB, possession of a bachelor’s degree or higher earned individuals an aggregate value five times higher than individuals with only associate degrees. Primary residence was still the top asset category across the board, but the value as share changed with differing educational categories. 

Households with at least a bachelor’s degree saw their primary residence equal 23%  as a share of total assets. Why? These individuals had other assets like business interests, other financial assets and retirement accounts that contributed. For individuals with an education level of GED or no high school diploma, their primary residence was 50% of total assets.