Now that we are in the fall season of 2022, we’ve got a cooling housing market. With an increase in mortgage rates, and mounting economic concerns. All of these issues have some people questioning if they should still consider buying a home this year? While it’s true this year has had unique challenges for homebuyers, it’s important to factor the long-term benefits of homeownership into your decision.
Ask around! 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 gain equity and wealth as a home’s value grow over time.
The National Association of Realtors (NAR) explains the long-term benefits of homeownership in a recent study “Metro Area Housing Wealth Gains”.
“Home equity gains are built up through price appreciation and by paying off the mortgage through principal payments.”
Home Price Growth Over Time
Even though home price appreciation has moderated this year, home values have still increased significantly in recent years. The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy those gains have been over the last five years.
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 say home 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 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 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. Please contact us if you’re ready to start your journey to homeownership in the Gainesville area.