The numbers
The Federal Reserve's Survey of Consumer Finances is about the most thorough data we have on household wealth in America. The most recent full survey put the median homeowner's net worth at roughly $400,000, compared to about $10,000 for renters. That's a gap of roughly 38 to 40 times, and more recent industry analysis building on the same Fed data puts it even higher.
I like this number because it comes from the government, not from someone trying to sell you a house. Dave Ramsey's team has pointed to the same research for years. In his words, homeownership is one of the most consistent tools ordinary people use to build real wealth over a lifetime.
Why the gap is so large: home equity typically makes up 40-50% of a homeowner's total net worth. Every mortgage payment is partly forced savings. Some of it goes to interest, but a real portion builds equity that's yours. Rent builds equity too, just for your landlord. Month after month, that difference adds up.
It's not just appreciation
A lot of people assume the gap is just because home values go up. That's part of it, but I don't think it's the whole story. Homeowners also tend to build wealth in other places at higher rates, and I think a big reason is the discipline that comes with owning: a fixed payment, savings that happen whether you feel like it or not, and over time, the equity and confidence to invest in other things.
Renters, meanwhile, usually face rising rent with nothing to show for it at the end.
This isn't a "buy no matter what" argument
To be clear, I'm not telling you to buy a home you can't afford just to chase a statistic. A house that stretches your budget too thin brings its own kind of stress, and that's not the point. The point is that renting indefinitely, just out of hesitation or waiting for a "better time," tends to be the more expensive choice over the long run. Not the safer one.
What this looks like in practice
A starter home isn't your forever home, and it doesn't need to be. Buy something that fits your budget today, build equity in it, improve it as you're able, and let time do the rest. Most long-term homeowners I've worked with didn't get there with one perfect purchase. They got there by getting in and staying in, instead of waiting on the sidelines.
Whether now is the right time for you specifically is a question for real numbers, not a general statistic. I'm happy to walk through what buying versus renting looks like for your situation.
Talk through your numbers