Homeownership is a cherished part of American society and a cornerstone of the American Dream. With the homeownership rate at 65% within the U.S. and home prices near record highs, the question is: how much house is too much?
In other words, at what point is your house too big a portion of your overall assets? As a reminder, your total assets are everything that you own. This would include: your car, your house, your stocks, your bonds, your retirement accounts, and much more.
Given this, what percentage of your total assets should be in your primary residence? Is there a point where this percentage gets too high? And what are the risks associated with having too much of your money in a single property?
All of these questions, and more, will be answered in this blog post. We’ll explore the data behind homeownership in the U.S., some rules of thumb when it comes to how much house you can afford, and why this matters.
To start, let’s look at how much house the typical American owns.
How Much House Do Most Americans Own?
Though only 65% of Americans own their own home, among these homeowners, a significant percentage of their assets are in their primary residence. According to the 2022 Survey of Consumer Finances, the typical U.S. homeowner (i.e. median homeowner) has 60% of their total assets in their home.
To put this in perspective, the median total assets among U.S. homeowners is around $530,000. This means that roughly $318,000 of those assets (60%) would be in one asset—their house. The rest of their assets would be everything other than their house. But that’s just the median, what about the rest of the distribution? Here’s what that looks like:
10th Percentile = 18% of Total Assets in Primary