Homeowners have nearly 40x the wealth of renters. But what's causing the wealth gap?
Homeownership has long been known as a tool for building wealth and lifting Americans into the middle class. But a new report highlights other ways in which renting burdens many households, keeping them from financial stability and wealth creation.
“Less positive cash flow, fewer savings, and lower credit all highlight the challenges renters often face in trying to build stronger financial well-being,” notes the report, from the Aspen Institute, a nonpartisan think tank.
Some public programs have mitigated many of those issues, the report says suggesting that there are policy solutions available. In a housing market as strained as this one, that might be crucial, since the wealth-building opportunities offered by homeownership may not be achievable for as many people in the future as they were in the past.
What’s more, many renters are satisfied with their current arrangement, the report says, noting that “a Federal Reserve study revealed that 57% of renters find renting more convenient and flexible than homeownership and 36% simply prefer to rent.”
