Today’s cooling housing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.
Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how you gain equity and wealth as home values grow with time.
The National Association of Realtors (NAR) explains:
“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”
Here’s a look at how just the home price appreciation piece can really add up over the years.
Home Price Growth Over Time
Even though home price appreciation has moderated this year, home values have still increased significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy those gains have been over the last five years.
If you look at the percent change in home prices, you can see home prices grew on average by almost 64% nationwide over that period.
That means a home’s value can increase substantially in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains you stand to make become even clearer (see map below):
The second map shows, nationwide, home prices appreciated by an average of over 290% over roughly a thirty-year span.
While home price growth varies by state and local area, the nationwide average tells you the typical homeowner who bought a house thirty years ago saw their home almost triple in value over that time. This is why homeowners who bought their homes years ago are still happy with their decision.
Even if home price appreciation eases as the market cools this year, experts say home prices are still expected to appreciate nationally in 2023. That means, in most markets, your home should grow in value over the next year even if the pace is slower than it was during the peak market frenzy when prices skyrocketed.
The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and fight annual lease hikes for no long-term financial benefit? Instead, consider buying a home. It’s an investment in your future that could set you up for long-term gains.
Don’t let the shifting market delay your dreams. Data shows home values typically appreciate over time, and that gives your net worth a nice boost. If you’re ready to start your journey to homeownership, let’s connect today.
Find Your Next Home
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Please call/text/message/email me to share your thoughts about your next home and I’ll identify your most important next step.
If you’re reading this late at night and want to start now, first send me an email, then focus on these items of the home buying process: 1) Download my Home Buyers Guide to learn general information (if you’re into doing your own research). 2) Talk to a quality mortgage lender and get pre-approved for financing. 3) Search for homes currently on the market to get a feel for the types of homes, locations, and price points available. 4) Read my Denver real estate blog (updated daily!) to further educate yourself about the market and relevant topics for home buyers. And of course, when in doubt, just call me and I will help you with each step of your journey.
When It Is Time To Sell Your Home
Find out how much your home is worth and download my free guide for home sellers for helpful information. It is important to choose a REALTOR® who can develop an effective marketing strategy for your property, negotiate well on your behalf, and has the knowledge to provide an accurate market comparison so you can determine the right asking price. The market changes each week and your asking price is an important component of your selling strategy. I am here to listen and serve. I will share how your home stacks up against the competition, or how we can position your property to sell quickly and for a good price, or talk through any unique circumstances or goals. Contact me today to start a discussion…
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