U.S. Housing Wealth Skewed Even More Toward Affluent Over Past Decade

Overall, the total value of owner-occupied homes in the U.S. rose $8.2 trillion over the decade to $24.1 trillion, NAR said. Those wealth gains have continued in the past two years, as housing prices have surged because of robust demand and limited supply.

The housing-value gap between households earning more than 200% of their area’s median income and other homeowners widened significantly over the decade. In 2010, high-income homeowners held 28% of all U.S. housing wealth. By 2020, that figure rose to 42.6%.

The share of housing wealth held by middle-income households declined to 37.5% in 2020, from 43.8% in 2010. Low-income housing wealth fell to 19.8% in 2020, from 28.2% in 2010.

“It’s a wake-up call,” said Gay Cororaton, senior economist and director of housing and commercial research at NAR. “Policies have to be focused more on making sure that the lower-income and many more middle-income folks participate in the benefit of homeownership.”

Homeownership is a path for building wealth in the U.S. The median homeowner had $254,900 in wealth in 2019, compared with $6,270 for the median renter, according to the Federal Reserve’s Survey of Consumer Finances. And for all but the highest-income households, their residential properties accounted for the bulk of their overall wealth, according to

First American Financial Corp.

The U.S. homeownership rate peaked at 69.2% in 2004 before sliding below 63% in 2016, as millions of households went through foreclosure or exited homeownership during the housing crash and recession. It has risen since then to 65.5% in the fourth quarter of last year, according to the Census Bureau.

Middle-income and low-income households’ share of total housing wealth declined in the decade ended in 2020 because they made up a smaller proportion of overall homeowners than they did in 2010, the NAR report said.

Homeowners have been the biggest beneficiaries of the current housing boom, and many have been able to profit from the rising market and trade up. Nate Martinez Jr., a real-estate agent, bought a three-bedroom townhouse in Peoria, Ariz., for $78,000 in 2011, when he was 21. A decade later, he sold it for $270,000 and bought a newly built four-bedroom home in a neighboring city for $303,000.

“It was just a huge upgrade,” he said.

In all, homeowners with mortgages gained more than $3.2 trillion in equity in the third quarter of 2021 compared with a year earlier, according to housing-data provider CoreLogic.

But accessing the benefits of homeownership has become frustrating for those who aren’t already in the market. Fast-rising home prices in the past two years have made it costlier for first-time buyers to become homeowners, especially as mortgage rates have also climbed in recent months. And even for households that can afford to buy a house, the severe shortage of homes listed for sale has made it difficult to get an offer accepted.

The share of first-time buyers in the existing-home market fell to 27% in January, down from 33% a year earlier, NAR said last month.

“It’s always hard to become a homeowner. It’s more difficult now than it has been in the past because of the shortages of supply and the competitive nature of the market,” said Mark Fleming, chief economist at First American. “You can’t buy what’s not for sale.”

Write to Nicole Friedman at [email protected]