With today’s cooling housing market, rising mortgage rates, and growing economic concerns, some are asking if we should buy another home this year. While this year presents a unique set of challenges for hombuyers, it’s important to consider the long-term benefits of homeownership when making decisions, please think about it. If you know someone who bought a house 5, 10, or even 30 years ago, it’s probably hard to find someone who regrets that decision. why is that? The reason has to do with how you acquire equity and wealth as your asset value increases over time. The National Association of Realtors (NAR) states: “Home equity gains are built on rising prices and paying off mortgages with principal payments.” Now let’s see how the increase in house prices alone really adds up over the years.
Rise in house prices overtime
Although house price growth has slowed this year, home prices are still raising significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how remarkable these increases have been over the past five years.
Looking at the percent change in house prices, we can see that house prices across the country increased by an average of about 64% over this period.
This means that home values can rise significantly in the short term. Extending this period even further reveals the benefits and significant benefits of homeownership (see map below).
The map shows house prices across the country, which has averaged over 290% over about 30 years. Home price growth varies by state and region, but the national average shows that the typical homeowner who bought a home 30 years ago has nearly tripled the value of their home back then. . So homeowners who bought their homes years ago are still happy with their decisions. Experts expect home prices to rise nationwide in 2023, even if the market cools and home price growth slows this year. That means your home should be appreciated in most of the market next year, albeit at a slower pace than during the height of the market frenzy when prices were skyrocketing. Instead of buying homes, there are rents, and rents have been rising for decades. So why pay rent and oppose annual rent increases without reaping the long-term financial benefits? Consider buying a home instead. It is an investment in the future that can generate long-term returns.
Final Thoughts
Don’t let the changing market hold back your dreams. Data show that property values typically increase over time, thereby significantly increasing net worth. If you’re ready to start your homeownership journey, connect today.
Find out why Kaya Homes is the leader in Long Island real estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, Baldwin, East Rockaway, Woodmere, Cedarhurst, Hewlett Harbor, and Freeport area.
Tue, 11 Oct 2022 20:46:57 +0000
