People should consider the long–term benefits of homeownership when deciding whether to buy a home this year, despite the higher mortgage rates, inflationary pressures and fears of a potential recession.
70% of respondents in a recent Fannie Mae survey believe that buying a home is a safe investment since home values grow with time and, by extension, grow their own wealth. This is further proven by people who have bought homes 5, 10, or even 30 年 ago rarely regretting their decision.
Here’s a look at how just the home price appreciation piece can really add up over the years.
Home Price Growth over Time
The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends.
If you look at the percent change in home prices, you can see home prices grew on average by just over 56% nationwide over a five-year period.
Home prices gained solid ground over a short period of time, with some regions slightly higher or lower than the average. Expanding this time frame further reveals the great benefits that come with homeownership, as homeowners have seen steep gains in recent 年 (see map below):
The second map shows, nationwide, home prices appreciated by an average of over 290% over a roughly 30-year span.
The typical homeowner who purchased a house 30 年 ago saw their home value almost triple, resulting in many homeowners being content with their decision.
Experts were predicting a crash in home prices in late 2022, but it didn’t happen. Home prices have leveled since the ‘unicorn’ years, but they are already starting to rise again in many areas. Therefore, most homeowners can expect their home value to increase in the coming year.
The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and deal with annual lease hikes for no long-term financial benefit? Instead, consider buying a home.
Consider the substantial long–term advantages of owning a home and reach out to us today if you‘re ready to discuss it.