Should I STILL Buy a Home This Year?
A really hot topic lately is whether or not now is still a good time to buy a house! The short answer is, YES! While interest rates have been up, they are still historically low. Additionally, experts are saying, While mortgage rates are expected to drift higher over the coming months, much of the rapid increase in rates is likely behind us. -M. Flemming, Chief Economist at First American. In today's blog post, we will take a look at the long-term benefits of home ownership. Enjoy,
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Today's coolinghousing 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 gainequityandwealthas home values grow with time.
TheNational 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 thoughhome price appreciationhas moderated this year, home values have still increased significantly in recent years. The map below usesdatafrom theFederal 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 thedrastic gainsyou 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 sayhome 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 isrenting, and rental prices have been climbing for decades. So why rent and fight annual lease hikes for no long-term financial benefit? Instead, considerbuying 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, reach out to a real estate professional today.
(Source: Keeping Current Matters)
As always, please reach out to me with any questions or if I can help you with your real estate needs. I'd love to help you on your journey to homeownership!