Why Buying a House Is a Good Investment
If you're thinking about buying a house, you want to know if you're making the right choice. For many, this means considering what home prices are expected to do in the coming years and how this may affect your investment.
This year, home prices are not falling dramatically. However, as the year progresses, some markets may gain value while others may lose value. That is why it is beneficial to consider the long term. Experts predict a return to a more consistent rate of price appreciation in the years ahead.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysts were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey (HPES). The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
The main takeaway is that experts do not expect a significant drop in national home prices, even though some markets will see price appreciation while others may see price depreciation. When they look further ahead, they see consistent price growth in the long run. That's a great example of why homeownership wins in the long run.
What Does This Mean for You?
Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (see graph below):
In this example, if you purchased a $400,000 home at the start of this year and factored in the HPES forecast, you could accumulate more than $54,000 in household wealth over the next five years. So, if you're wondering if buying a home is a good investment, consider how powerful a long-term wealth-building tool it is.
Experts predict that, while home prices may fall slightly this year, they will rise over the next five years. If you're ready to become a homeowner, know that buying now can set you up for long-term success as home values (and your own net worth) rise. Let's get together today to start the home-buying process.