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it seems like something simple is being made out to be overly complicated here.
No, something that needs to be properly understood before having a discussion is being glossed over.
Of course, only OP can tell us why "percent of net worth in one's home" even matters in the first place. Once it is known what one really is trying to address, then it is possible to choose an appropriate measure such as (house value / net worth) * 100% or (home equity / net worth) * 100%.
No, something that needs to be properly understood before having a discussion is being glossed over.
Of course, only OP can tell us why "percent of net worth in one's home" even matters in the first place. Once it is known what one really is trying to address, then it is possible to choose an appropriate measure such as (house value / net worth) * 100% or (home equity / net worth) * 100%.
the guy wants your house value divided by your total assets. i know he wasnt perfectly clear but i figured it out. what he wants to assess is to compare where he stands vs other people. this is something simple being made complicated for no reason other than offer some kind of matter for debate.
Let me please clarify- essentially a home is an asset class in a persons investment allocation. Actually you could classify the home as being a REIT without the income generation. So if you were to buy a REIT fund you may want to consider how much you already own in real estate with your home- obviously a REIT fund would consist mainly of commercial real estate.
I'm just trying to get a handle on what is considered the avg. percentage of the allocation dedicated to home ownership. As some posters stated that for them it is 40% for example. I know someone that is considering purchasing a new home without financing and the home will account for close to 60% of their net worth if they move forward. I was thinking the general rule of thumb would be something like 35-40% but wanted to ask on here in case someone actually new the specific number. I realize everyone has their own situation and goals but it just seemed to me that a lot of their net worth will be tied up in an illiquid investment. Thanks for all the responces
Let me please clarify- essentially a home is an asset class in a persons investment allocation. Actually you could classify the home as being a REIT without the income generation. So if you were to buy a REIT fund you may want to consider how much you already own in real estate with your home- obviously a REIT fund would consist mainly of commercial real estate.
I'm just trying to get a handle on what is considered the avg. percentage of the allocation dedicated to home ownership. As some posters stated that for them it is 40% for example. I know someone that is considering purchasing a new home without financing and the home will account for close to 60% of their net worth if they move forward. I was thinking the general rule of thumb would be something like 35-40% but wanted to ask on here in case someone actually new the specific number. I realize everyone has their own situation and goals but it just seemed to me that a lot of their net worth will be tied up in an illiquid investment. Thanks for all the responces
so are you looking for home value as % of net worth or home value as % of total assets?
Just curious of what percentage is the average for house as net worth? Example is 40% the norm? etc.
I think your question should be better defined because there are so many factors that play into someone's net worth, such as if they are married/filing jointly, have two sources of income, their age, location of real estate, whether you're valuing their estimated value of the house versus the equity they have on the note or mortgage, and etc.
For me and my wife, we are in our early 30s and live in the poor side of a high real estate valued region of Newport Beach, Ca, my wife is by far the breadwinner of taxable income, and the note we owe on our home is pretty much 40% of our combined net worth.
I think its a pretty useless ratio. its one of those things that will naturally improve over time as your overall net worth increases. the wealthier you become, the less significant of an asset your home is.
I saw chart that had house as about 15-25% of net wealth for Americans since 2000 due to changes n the house market and stock prices. For me, my primary house is about 10% of my net worth.
CA BAY Area middle class family. $1,000,000 home
$1,000,000 in investments
Small pension.
Home is 50% of assets.
Indiana middle class family. $100,000 home
$1,000,000 in investments.
Small pension
Home is 9% of assets.
Hmmmm?
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