Owning a home is the first step to building equity. Tenants build equity but not for themselves; they build it for the owners.
Equity is the difference in the value of the home and what is owed on the home. There are two dynamics that cause this to grow: appreciation and principal reduction.
As the home increases in value, it is said to appreciate. Various authorities will annualize an appreciation rate based on average sales prices from one year to the next. Since appreciation is based on supply and demand as well as economic conditions, it will not be the same year after year.
If you looked at a ten to twelve-year period, some would be higher than others and there may even be some individual years that it is flat or even declined. For the…