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Just Proving the Old Adage. It Takes Money to Make Money.

Just Proving the Old Adage. It Takes Money to Make Money.

The US Census Bureau reports that, “Wealth inequality between homeowners and renters is striking: Homeowners’ median net worth is 80 times larger than renters’ median net worth.”

The Bureau contends that the two largest drivers of wealth – equity in a home, and a retirement savings account – are out of reach for renters.

First off, renters’ incomes are generally significantly below those for homeowners. According to Zillow, “The typical home buyer in 2017 earned more than two times the typical renter.”

So, it’s harder for renters to save the thousands of dollars needed for a house down-payment. And when it comes to retirement savings, even if their employer offers the benefit, many renters cannot afford to see one more deduction coming out of their paychecks.

Here are some household wealth highlights as reported by the US Census:

  • 37% of households nationwide do not own a home and 47.1% of households did not have a retirement account. This gap in two key assets contributes to wealth inequality.
  • 9% of households held bank accounts, but the these accounts were only 8.5% of total household net worth.
  • Households without health insurance for any part of the year had median wealth of $16,860, compared with $114,000 for households where everyone was covered for the entire year.
  • Unmarried female homeowners/renters age 35 to 54 had a median wealth of $14,860. That represented 39.5% of their unmarried male counterparts’ wealth.
  • Non-Hispanic whites had a median household wealth of $139,300, compared with $12,780 for black householders and $19,990 for Hispanic householders.
  • Households in which the most educated member held a bachelor’s degree had a median wealth of $163,700, compared with $38,900 for households where the most educated member had a high school diploma.

Here’s how all this hits home in the Nutmeg state. According to the 2018 ALICE report. “In 2016, 67 percent of households owned a home. Renting a home has become less affordable as the cost of rentals has continued to rise, while demand for low-cost multi-family housing has outpaced the supply.” So, we may have slightly more homeowners than the national average, but they and their renter counterparts are paying more housing than those in most other states. Please, sir, my we have some more affordable housing?