Affordable Homes Are Gaining Value Faster Than More Expensive Homes

Owners of affordable homes are gaining wealth from their property the fastest, according to new research. These findings emphasize the value of homeownership, and the obstacles for aspiring homebuyers.

First-time homebuyer demand continues to outpace the supply of starter homes in the U.S. housing market. Over the past five years, affordable home equity has increased 44.4 percent. Over the past year, the affordable housing segment of the market's stock gained 8.5 percent in value. As for the more valuable stock, it saw a 3.6 percent gain over the last year, and 26.6 percent over the last five, according to Zillow's research.

The phenomenon – which has become more pronounced in the past few years — underscores the power of homeownership to build wealth. It also points to a problem with housing inventory: One reason lower-end home values are being driven up so quickly is that there’s tremendous demand and not enough homes for sale at the starter end of the market.

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