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Why Buying a Home Is a Sound Decision
If you’re thinking about a new home, you want to know that buying a home is a sound decision. And for many people, that means thinking about what home prices are projected to do in the coming years and how that could impact your investment.
This year, we haven’t seen home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Experts are predicting a return to a steadier rate of price appreciation in the years that follow.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they think will happen over the next five years with home prices. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
The big takeaway from this is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets will see home price appreciation while others may depreciate. And looking further out, in the long run, they see steady price appreciation. This is a great illustration of why homeownership wins over time and continues to be the route to building wealth in America.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (see graph below):
In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.
According to the experts, while we may see slight depreciation this year, home prices are expected to grow over the next five years. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) are projected to grow. Let’s connect so you can begin the homebuying process by getting pre-approved for a mortgage.