This factor may determine whether you get rich. You don't control it.
Summary
New research shows that owning a home in the U.S. is often linked to how wealthy your parents are, not just how much money you make as an adult. People with parents who owned homes have higher chances of buying homes themselves, especially in expensive cities, while those from less wealthy families face more challenges.Key Facts
- Researchers studied 3.4 million families and their children born between 1978 and 1986 to see who bought homes between 2019 and 2021.
- Homeownership depends more on parents' wealth than on a person's income, particularly in costly housing markets.
- Even if children earn similar incomes, those with wealthier homeowner parents are more likely to own homes and have more valuable properties.
- Wealth is different from income; it includes assets like home equity and savings, which often pass from parents to children.
- Homeowners had a median net worth of $396,000 in 2022, while renters had only $10,400 on average.
- Expensive areas like California, Boston, New York, and Seattle make it harder for people from poorer families to buy homes.
- In regions with lower home prices, such as the Midwest and Southeast, it is easier for children from less wealthy families to become homeowners.
- Rising home prices after 2021 could widen the gap in homeownership based on family wealth.
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