Creating generational wealth is a goal that resonates with many families today. At North Shore Trust & Savings, we believe that homeownership is one of the most powerful tools for achieving this goal. Through our residential lending team at Oak Leaf Community Mortgage, we aim to highlight how owning a home can significantly contribute to building and preserving wealth for future generations.

Homeownership is more than just having a place to live; it’s a crucial driver of wealth accumulation. Here’s why:

• Significant Net Worth: According to the Federal Reserve, the median net worth of homeowners was $255,000 in 2019, compared to just $6,300 for renters. This stark contrast shows how homeownership can form the foundation of financial stability.
• Appreciation Over Time: Over the past 30 years, U.S. home values have appreciated at an average rate of 4% annually, making homeownership a reliable long-term investment.

• Passing Down Assets: A report from the Urban Institute reveals that 80% of all generational wealth in the U.S. is transferred through homeownership. By inheriting property, families can provide heirs with a significant asset that promotes financial security.
• Avoiding Rising Costs: Families that inherit homes benefit from avoiding rising rental costs and can access home equity to enhance their financial stability.

• Higher Net Worth: According to the National Association of Realtors, the median net worth of investors with rental properties is nearly four times higher than that of non-investors.
• Tax Advantages: Real estate investments come with tax benefits, including deductions on mortgage interest and property depreciation, enhancing overall wealth-building potential.

Homeownership functions as a form of forced savings. Every mortgage payment builds equity, allowing homeowners to accumulate wealth over time without needing to actively save money.

• Stable Investment: Real estate is a relatively stable asset compared to stocks. Historical data shows that it often outperforms stocks in long-term returns, providing a hedge against inflation.
• Market Resilience: Even during periods of market volatility, real estate remains a safer investment choice.

By passing down homes, families can significantly reduce housing costs for future generations. This not only alleviates financial burdens but also frees up resources for investments, education, and savings.

Increasing access to homeownership is essential for closing the racial wealth gap. Research from the Brookings Institution indicates that higher homeownership rates among African American and Hispanic families are critical for achieving wealth parity with white households.

Homeownership also offers several tax advantages:

• Mortgage Interest Deductions: Homeowners can deduct mortgage interest and property taxes from their federal income tax.
• Capital Gains Exclusions: Homeowners can exclude up to $250,000 (or $500,000 for married couples) from taxes when selling their primary residence.

At North Shore Trust & Savings, we are dedicated to empowering families through homeownership. By understanding the vital role that owning a home plays in building generational wealth, families can make informed decisions that enhance their financial future.

Contact us today to explore how our Oak Leaf Community can help you achieve your financial goals. Together, we can build a brighter future for you and your family.