Rising home values ​​over the past decade have led American homeowners across income levels to acquire wealth of at least tens of thousands of dollars, according to the latest Study by the National Association of Realtors (NAR).

Median-income homeowners have amassed more than $122,100 in wealth as their homes increased in value by 68%, NAR reported. Meanwhile, lower-income homeowners saw wealth grow by $98,900 from home value appreciation. At the same time, higher-income households saw gains of $150,800.

“This analysis shows how homeownership is a catalyst for building wealth for people from all walks of life,” said NAR chief economist Lawrence Yoon. “Monthly mortgage payments are often seen as a compulsory savings account that helps homeowners build net worth nearly 40 times greater than renter wealth.”

In addition, homeowners who benefited from rising home prices also got rid of 21% of debt in the past decade, NAR finds. In particular, Americans who were able to secure a mortgage rate of 4% or less at the start of the COVID-19 pandemic may be able to pay off a larger portion of the debt, Yoon said.

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It is where homeowners saw the greatest wealth gains

The NAR noted that although homeowners across income levels accumulated wealth through home appreciation, landlords in some areas experienced much higher levels than others. Not surprisingly, homeowners in expensive metro areas saw the biggest gains. In the San Jose metro area, for example, low-income earners have made nearly $630,000 in the past decade. Median-income homeowners saw gains of about $643,000

Additionally, the top 10 areas in which low- and middle-income homeowners saw the highest wealth gains by home value appreciation were in California, according to NAR. In these areas, the lowest-income homeowners saw more than $290,000 in wealth accumulation. Meanwhile, middle-income homeowners earned more than $314,000.

“Many of these expensive regions also had relatively lower income disparities in wealth accumulation among low- and middle-income earners than other regions,” the association said in its report. “In the past decade, homes owned by low-income families have risen in value faster than homes of middle-income earners in the San Francisco, Salinas, Los Angeles, and Sacramento metro areas.”

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Home price growth slowed

Some studies have indicated that while many homeowners have accumulated wealth through appreciating home value, home price growth may be slowing.

Single-family home prices rose 4.7% year-on-year in the first quarter of 2023, according to the latest Read the Home Price Index by Fannie Mae. However, the turnaround was down from the prior quarter’s adjusted annual growth rate of 8.6%, Fannie Mae said.

“As expected, the annual rate of increase in home prices slowed significantly in response to the rapid and significant increase in interest rates,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement.

In addition, some experts said that they expect to see a decline in home prices and mortgage rates through 2023. House prices are expected to decline by 1.6% during this year, According to a panel of economists and housing experts polled by Zillow.

“The majority of experts now expect an outright decline in US home prices in 2023,” Pulsenomics Founder Terry Lopes he said in a statement.

And when asked when they expect 30-year fixed-rate mortgage rates to be highest between 2023 and 2025, 63% of experts said in the first quarter of 2023.

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