• calendar_month October 18, 2022

Some people are wondering if they should buy a home this year because of the current housing market slowdown, rising mortgage rates, and growing economic concerns. While this year presents unique challenges for homebuyers, it is critical to consider the long-term benefits of homeownership before making a decision. 

Think about the following: If you know anyone who purchased a home five, ten, or even thirty years ago, you are unlikely to find anyone who regrets their decision.  Why is this the case?  The reason is related to how you maintain equity and wealth as the value of your home increases over time.

According to the National Association of Realtors, "home equity gains are built up through price appreciation and by paying off the mortgage through principal payments" (NAR).

Here's an example of how simply increasing home prices can add up over time. 

Home Prices Rise Over Time 

Despite a slowing in price appreciation this year, home values have risen significantly in recent years. 

Over a five-year period, home prices in the United States increased by nearly 64% on average.

This means a home's value can skyrocket in a matter of months. When you extend that time frame even further, the advantages of homeownership and the significant gains you stand to make become clearer.

Over a thirty-year period, home prices in the United States increased by more than 290% on average. 

While home price growth varies by state and locality, the national average shows that a homeowner who bought a home thirty years ago saw its value nearly triple during that time.  This is why homeowners who purchased their homes many years ago are still pleased with them.

Even if the market cools this year, experts predict that national home prices will continue to rise in 2023. That means your home's value will rise in most markets over the next year, albeit at a slower rate than during the peak market frenzy when prices skyrocketed.

Renting is a viable alternative to purchasing a home, and rental prices have been steadily rising for decades. So, why pay rent and fight annual lease increases if there is no long-term financial advantage? Consider buying a house instead. It's a long-term investment in your future that could pay off.

In conclusion 

Don't let the changing market derail your ambitions. According to data, home values typically rise over time, increasing your net worth.