It is a truth many people don’t like to think about or mention, but when someone says that they own their home, the word “own” deserves to be in air quotes more than anything has ever deserved to be in air quotes before. Along with Kanye West being a “genius” and salads from fast food restaurants being “healthy,” people saying they own their homes is one of those little lies we like to tell ourselves.
As realtor.com and credit.com report, the truth is, a bank usually owns the majority of most homes. That isn’t to say, however, that the average American doesn’t have a lot of money tied up in their house. A new report from the Urban Institute shows the average American has $150,506 tied up in their home investment based on what is left over after the debt on the mortgage is subtracted from the home’s 2015 value. As you may expect, this accounts for a huge portion of many American’s net worth.
A person’s housing wealth is likely to be very different depending on where they live and how old they are. For example, older people who have paid off larger portions of their mortgages are going to own more of their homes. Or, places that have experienced huge increases in real estate prices can also contribute significantly to real net housing worth.
In Washington, D.C., the average net worth for a home is around $381,000. In Arkansas, the net worth is only around $80,000. Or take California, for example. The state accounts for 9.3 percent of all owner-occupied housing units, yet it makes up 20.4 percent of total net housing wealth in for the country.