Home Sweet Savings

Home may be where your heart is. But for the rich, it's not where their wealth is.

A new study for the Consumer Federation of America and national housing groups found that the richer you are, the less your home equity figures into your wealth. According to the Federal Reserve Board's Survey of Consumer Finances data used for the study, home equity represent 42% of the average homeowner's net wealth. (And 97% of homeowners have at least some equity in their home.)

The most affluent households have just 26% of their net wealth represented in home equity. (The typical homeowner has accumulated $70,000 in equity.) The home equity/net wealth ratio shoots up to 80% for lower-income households -- a whopping leap.

CFA concluded that low-income households depend on home ownership to buoy their nest egg. The statistics bear that out. In 2001, the most recent year for which Fed data is available, low-income homeowners reported $50,000 in net wealth -- more than $42,000 on the positive side of the balance sheet than the typical low-income household.

See where you stand with CFA's Personal Wealth Estimator. Then visit our Home Center and tinker around with the tools to see if you're making the most of one huge chunk of your total net worth.

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