Why Renting Might Be Costing You More Than You Think

Despite a strong economy and the persistent myth that renting gives you more financial flexibility, new data—and hard-earned experience—paint a different picture. In a recent financial discussion, an industry expert shed light on a growing wealth gap between renters and homeowners, supported by compelling real-world observations and Federal Reserve data.

If you're waiting for interest rates or home prices to drop before buying, you might be losing more money than you realize.

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Homeownership: America’s Primary Wealth-Building Tool

According to recent insights, most Americans build their wealth through homeownership, not through renting and investing elsewhere. This is not just anecdotal—it’s supported by years of economic research, including the Federal Reserve’s triennial Survey of Consumer Finances.

“When it comes to wealth creation, you're not going to get there if you're a renter,” says Art Alvarez. “The majority of people in this country, let alone this state, build wealth through homeownership.”

The Data Doesn’t Lie

Every three years, the Federal Reserve analyzes household wealth in the U.S. The results consistently show that homeowners accumulate significantly more wealth than renters, even when both groups earn similar incomes.

Homeowners benefit from forced savings through mortgage payments.

They build equity as property values increase.

Renters, in contrast, often struggle to accumulate comparable net worth, despite intentions to invest elsewhere.

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The “Invest Instead of Buy” Myth—And Why It Rarely Works

Some high-income earners argue they can beat the wealth curve by renting and investing their would-be mortgage money in stocks, bonds, or even cryptocurrency. While this might sound financially savvy in theory, it doesn’t hold up in practice.

“In reality, these high-income renters don’t invest enough of their money to build wealth,” Art Alvarez noted. “They just spend more.”

Where the Money Really Goes

The truth? Many renters overestimate their discipline and underestimate lifestyle creep:

Fancy cars with monthly payments of $1,500 or more

Regular nights out with dinner tabs of $200–$300

Trendy clothing, gadgets, and non-essential upgrades

Instead of investing, disposable income often goes toward consumption, not wealth-building.

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Real-World Lending Insights: The Hidden Cost of Long-Term Renting

Drawing from first-hand lending experience, the speaker shared a pattern that emerged repeatedly: High earners who rented for years often had shockingly low savings.

“I look at applications and think, ‘Wow, look at how much this person makes.’ But then I look at their bank accounts and it's remarkably low.”

This real-world disconnect between income and actual wealth is a wake-up call. Many renters are surprised to discover how little they’ve saved, despite years of good income, simply because they lack the structure that homeownership provides.

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Why Now Might Be the Right Time to Buy—Despite Interest Rates

Some would-be buyers are holding out, hoping mortgage rates or home prices will fall. But in the meantime, they’re:

Paying rent that doesn’t build equity

Missing out on market appreciation

Falling behind their homeowner peers in wealth growth

As the speaker noted, “There are many people making a very good living, and yet they're stubborn about staying on the sidelines… That has caused them to leave money on the table.”

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Key Takeaways: How to Start Building Wealth Through Real Estate

Don’t wait for a “perfect” time to buy. The ideal conditions may never come.
Understand the power of equity. Every mortgage payment is a step toward financial freedom.
Know yourself. If you’re not actively investing your extra income, you’re likely spending it.
Consider homeownership as a long-term strategy. It’s not just about shelter—it’s about building wealth.

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Conclusion: Wealth Isn’t Just About Income—It’s About Structure

If you’re earning well but still renting, take a moment to ask: Where is all that money going? The data, expert insights, and real-world lending stories all point in the same direction—homeownership is one of the most reliable paths to building long-term wealth in America.

If you're tired of watching your rent payments go toward someone else’s mortgage, it's time to change the narrative. MortgageWorks is here to help you explore your options, crunch the numbers, and find a clear path toward homeownership. Don’t wait for the market to change. Take control of your financial future today.

Contact MortgageWorks now at MWLoan.com and schedule a free consultation with one of our expert loan advisors. Let’s start building your wealth—one brick at a time.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.