The Long-Term Advantages of Homeownership
If you're thinking about purchasing a home soon, increased mortgage rates, rising property prices, and continued affordability worries may make you question if it's still a good time to do so. While those market factors are significant, there is more to think about. You should also consider the long-term benefits of owning.
Consider this: if you know somebody who purchased a property 5, 10, or even 30 years ago, you're unlikely to find anyone who regrets their decision. Why is this so? The explanation is related to how house values rise over time and, as a result, how your own wealth rises. That may explain why, according to a recent Fannie Mae survey, 76% of respondents believe buying a home is a secure investment.
Here’s a look at how just the home price appreciation piece can really add up over the years.
Home Price Growth over Time
The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends:
If you look at the percent change in home prices, you can see home prices grew on average by just over 57% nationwide over a five-year period.
Some regions are slightly higher or lower than the national average, although property prices have risen steadily in recent years. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below):
The second map shows, nationwide, that home prices have appreciated by an average of over 297% over a roughly 30-year span.
According to this national average, the average homeowner who purchased a home 30 years ago had their home nearly triple in value during that time. That is a major reason why so many homeowners who purchased their homes years ago are still pleased with their decision.
And, despite predictions throughout the year that housing prices would plummet, this has not occurred. In fact, economists predict that housing values will continue to grow for the foreseeable future.
If you're wondering if buying a home now is still a good investment, consider the long-term benefits of homeownership. Let's talk when you're ready to begin your home-buying experience.