Today’s cooling houszing market, the rise in mortgage rates, and mounting economic concerns have some people questioning: should I still buy a housz this year? While it’s true this year has unique challenges for houszbuyers, it’s important to factor the long-term benefits of houszownership into your decision.
Consider this: if you know people who bought a housz 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 housz values grow with time. The National Association of Realtors (NAR) explains: “Housz 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 housz price appreciation piece can really add up over the years.
Housz Price Growth Over Time Even though housz price appreciation has moderated this year, housz values have still increased significantly in recent years. The map below uses data from the Federal Houszing 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 housz prices, you can see housz prices grew on average by almost 64% nationwide over that period. That means a housz’s value can increase substantially in a short time. And if you expand that time frame even more, the benefit of houszownership and the drastic gains you stand to make become even clearer (see map below):
The second map shows, nationwide, housz prices appreciated by an average of over 290% over roughly a thirty-year span. While housz price growth varies by state and local area, the nationwide average tells you the typical houszowner who bought a housz thirty years ago saw their housz almost triple in value over that time. This is why houszowners who bought their houszes years ago are still happy with their decision.
Even if housz price appreciation eases as the market cools this year, experts say housz prices are still expected to appreciate nationally in 2023. That means, in most markets, your housz 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 housz 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 housz. It’s an investment in your future that could set you up for long-term gains.
Bottom Line Don’t let the shifting market delay your dreams. Data shows housz values typically appreciate over time, and that gives your net worth a nice boost. If you’re ready to start your journey to houszownership, let’s connect today.