Is your home your most valuable asset? Until the last 30-40 years, for most Americans the answer to that question was yes. Over that time frame, pensions from employers mostly dried up and were replaced by 401(k)s and similar retirement accounts where the balance is eventually accessible. For those that have been dedicated to investing in their retirement plan and are drawing closer to retirement, those retirement nest eggs are larger, much larger in some cases, than the value of their residence.
Notable Number 1 in this week’s Weekly Market Review details the significant rise in home values over time. With this surge, some individual’s home value have once again become their largest asset. How you financially and strategically use this large asset is a question and debatable topic. For some, the equity in the home is a sacred asset and one that should never be leveraged or collateralized. For others, tapping into this large asset via a home equity line of credit or refinance is an opportunity to make additional investments and build additional wealth.
One thing is for certain, for all the headaches that come along with home ownership, being a homeowner has been a great wealth building vehicle over time.
As always, we hope you find the Weekly Market Review both informative and interesting. Have a great week!
Trevor N. Coe, CFP®