Homeownership Remains the Largest Asset for Households

Homes remain the primary source of household wealth, according to the Federal Reserve’s 2019 Survey of Consumer Finances. Homeownership rates remain low, with the 2016 homeownership rate dipping to a low of 63.7% with a promising increase in 2019 to 64.9%. Primary residences account for nearly one quarter of all household assets, beating out other financial assets such as business interests and retirement accounts. The aggregate value of assets increased with age generally, but the distribution of major assets varied greatly among age, race, and ethnicity groups, says the National Association of Home Builders.

Across age groups for which households were under the age of 55 and above 75, the primary residence was the largest asset on these households’ balance sheets. For households aged between 55 and 74, the primary residence falls to the second largest asset category, following business interests and other financial assets.

Figure 3-6 shows the distribution of assets by age, race and ethnicity. For white (non-Hispanic) households, the distribution was similar to one shown in Figure 2 as white (non-Hispanic) households accounted for 69% of the sample.

A critical finding was that the primary residence was the largest asset for black/African American (non-Hispanic), Hispanic/Latino and Other or Multiple race3 groups in all age groups. The only exception was for households aged between 64 and 75, for which the share of primary residence was approximately equal to the share of other financial assets. And most primary residence shares in these three racial and ethnic groups were higher than 30%, indicating that household wealth for these groups heavily relied on the value of primary residence, especially for Hispanic/Latino households.

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