Kansas City Homeowner Net Worth Has Skyrocketed

Many Kansas City homeowners are trying to decide whether buying or renting a home in the current housing market makes more sense. If you’re in the same boat and weighing your options, there’s one key data point to consider when making this decision. The Federal Reserve Board releases the Survey of Consumer Finances (SCF) every three years. This report covers the difference in net worth for both homeowners and renters.

Spoiler alert: the gap between the two is substantial. The average homeowner’s net worth is almost FORTY TIMES greater than a renter’s. Sound too good to be true? Check out the data and see for yourself! (see graph below):

Why Is Kansas City Homeowner Net Worth So High?

In an earlier version of this report, the average homeowner's net worth was roughly $255,000. This number is staggering enough compared to the average renter's net worth of $6,300, but in the most recent release from this year, the gap widened even further as homeowner net worth climbed. As the Survey of Consumer Finances (SCF) report says:

“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”

Home equity is one of the biggest reasons homeowner net worth has skyrocketed. Kansas City home prices went through the roof over the last few years, known as the ‘unicorn’ years for housing, because the number of homes for sale was low. This decreased supply caused a massive influx of buyers to take advantage of the then-record-low mortgage rates, causing an imbalance of supply and demand that drove prices higher and higher. As a result, most Kansas City homeowners saw their equity grow a lot during that time.

Are you currently in the process of deciding whether to rent or buy? Looking at this data can make you feel like you missed the boat on a major net worth boost, but as a recent article in The Ascent explains:

“Whether your net worth increased in recent years or not, there are steps you can take to boost that number in the coming years. . . buying a home can be a great way to grow your net worth, since home values have a tendency to rise over time.”

Historically, Kansas City home prices climb over time. Mortgage rates are closer to 7-8% in the current market, yet prices continue to increase in many areas of the country because supply is still lower than demand. For this reason, housing expert forecasts for the next few years call for ongoing appreciation – just at a pace closer to typical KC housing market trends.

Are you ready and able to purchase a home now? The Just Say Home Team can help you find the perfect property to invest in and build your net worth. While it likely won’t be the record ramp-up from the last few years, Kansas City buyers who act now can continue to grow equity in the years ahead.

As Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says: 

“. . . when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data . . . the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.”

Bottom Line

Are you on the fence and deciding between renting or buying a Kansas City home? Homeownership has a significant advantage of growing your net worth over time, as current data shows a substantial gap between the two options. The Just Say Home real estate agents have the knowledge and experience to help you learn more about home equity, net worth, and the many benefits of buying a home!