Why Homeownership ALWAYS Wins

Today’s higher mortgage rates, inflationary pressures,
and concerns about a potential recession 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 think about
the long-term benefits of homeownership when
making 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 home
values grow with time and how, by extension, that grows your own wealth. That
may be why, in a recent Fannie Mae survey, 70% of respondents say they believe buying a
home is a safe 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 56%
nationwide over a five-year period.
Some regions are slightly above or below that average, but
overall, home prices gained solid ground in a short time. 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, home prices appreciated by an average of over 290% over a roughly
30-year span.
This
nationwide average tells you the typical homeowner who bought a house 30 years
ago saw their home almost triple in value over that time. That’s a key
factor in why so many homeowners who bought their homes years ago are still
happy with their decision.
And while you may have heard talk in late 2022 that home prices would
crash, it didn’t happen. Even though home prices have moderated from the record
peak we saw during the ‘unicorn’ years,
prices are already rebounding in
many areas today. That means, in most markets, your home should grow in value
over the next year.
The alternative to buying a home is renting, and rental
prices have been climbing for decades. So why rent and deal with annual lease
hikes for no long-term financial benefit? Instead, consider buying a home.
Bottom Line
If
you’re questioning if it still makes sense to buy a home today, remember the
incredible long-term benefits of homeownership. If you’re ready to start the
conversation, reach out to our New Home Consultant, Kendall today at
970-716-6088