Rent vs Buy: How Homeownership Builds 40× More Wealth

Have you heard the claim that the housing market is no longer a wealth-building engine? That’s what Fortune just said in an article a few days ago. But don’t believe it.
Despite the headlines, homeownership remains one of the most powerful ways to build wealth—through appreciation, paying down your mortgage, tax savings, and locking in a fixed payment while rents keep climbing.

And by the way… don’t fall for the lie that you should ‘own nothing and be happy.’ That’s the World Economic Forum’s dream—not yours.

Fortune argues that falling prices, inflation, and tariffs mean housing isn’t the wealth builder it used to be.
But here’s the truth: those dips are exactly why smart buyers should consider buying now. Just like the stock market, the best time to build long-term wealth is often when prices are temporarily down.
Because in the long run, homeownership still wins big.

The Long-Term Benefits of Homeownership

40× Net Worth: Homeowners vs Renters

According to NAR, homeowners have a net worth about 40 times higher than renters. Why? Because they’re building equity through forced savings and property appreciation, while renters are paying off their landlord’s mortgage instead of their own.

Appreciation + Principal Reduction = Real Wealth

When you buy a home, you only put down a fraction of the price but get 100% of the upside.

What a deal—put 5% down and you keep all the appreciation. If your home appreciates just 5%, you’ve doubled your money. What other business arrangement allows you to do that?
On top of that, every mortgage payment chips away at your principal, increasing your equity month after month.

Fixed Mortgage vs Rising Rent

Here’s another advantage—your mortgage payment is fixed, while rent keeps going up year after year.
Historically, rents increase around 4% annually. Over 15 years, an $1800 / month payment goes to $3242 / month. This makes it almost impossible to retire without owning a home because your future wage increases go towards rising housing costs, making it very difficult to get ahead.

And here’s something unique: the U.S. is the only country in the world with a true 30-year fixed-rate mortgage. That means you can lock in your largest expense for three decades while inflation eats away at everything else. That’s an unbeatable deal that the rest of the world does not have

Tax Savings

On top of that, homeowners can deduct mortgage interest and property taxes, creating thousands in potential savings depending on your tax situation. It’s another way ownership keeps more money in your pocket over time. For example, if $1000 / month of your payment is interest and your tax bracket is 25%, you could potentially receive a $3000 / yr or $250 / month tax credit.

Home Equity as a Wealth Base

Home equity is the foundation of middle-class wealth. Americans hold over $35 trillion in home equity.
The median net worth of a homeowner is around $400,000, compared to just about $10,000 for renters.
And you’ve probably heard the saying—90% of millionaires come from real estate. Whether it’s exactly 90% or not, the truth is that real estate is the vehicle that has created millionaire status for the majority of everyday people.

Let’s break this down with real numbers.
Say you’re renting at $1,800 a month. That’s money gone forever—no equity, no savings.
Now compare that to buying a home with a $2,000 a month mortgage. At first glance, it looks like the mortgage is more expensive, right?
But here’s the reality:
About $300 a month of that mortgage goes straight to principal paydown—building your equity.

Add in $400 a month in tax savings from deductions, and you’re effectively lowering your cost even more.

Then factor in appreciation: on average, that home could be gaining $1,000 a month in value.

So your $2,000 mortgage really has an effective cost of only about $266 a month—compared to the full $1,800 that disappears when you rent.
And here’s the kicker: if rent increases just 3% a year, in 15 years that $1,800 rent payment grows to over $3,242 a month. Meanwhile, your mortgage payment? Still locked at $2,000.
Which would you rather have: a payment that skyrockets over time, or one that stays steady while building you wealth every month?

Short-Term Noise vs Long-Term Wealth

Now, I get it—homeownership comes with risks and responsibilities. Markets can dip. Homes require maintenance. And real estate isn’t as liquid as stocks.
But with smart planning—like keeping an emergency fund—these risks are manageable. And the long-term benefits outweigh the bumps in the road.

So yes, prices may fluctuate in the short term, but the long-term trajectory of homeownership—equity growth, appreciation, stability—continues to trend upward.
This is exactly why the Fortune article is shortsighted. Don’t let short-term noise distract you from long-term wealth.

And don’t believe the lie that you should ‘own nothing and be happy.’ That’s not the path to freedom—it’s the path to dependency.
Real wealth, real security, and real freedom come from ownership—owning your home, building equity, and creating generational wealth.

Takeaways

So let’s recap. The four pillars of homeownership are:

1. Appreciation plus principal reduction
2. Forced savings through equity
3. Tax advantages
4. Stability of a fixed payment vs. rising rents

And remember—most millionaires didn’t rent their way to wealth. They owned.
If you’re renting at $1,800 today, in 15 years that payment could balloon to over $3,242 a month. Meanwhile, a $2,000 mortgage would still be fixed, and every month it’s building you wealth through equity, tax savings, and appreciation.
If you’re ready to stop renting and start building real wealth, now may be the perfect time to buy on the dip.
Don’t believe the lie—because who you hire MATTers, and owning your own home still matters even more.
Hit like, subscribe, and let’s build wealth together.

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