Anyone who has been thinking about buying a home lately has been debating the top question on everyone's mind right now, and that is, should I buy or should I wait? Although it's not as simple an answer as a yes or no, you should take into consideration the following information to make your own decision.
What's the Future of Home Appreciation?
Each quarter, a national panel of over 100 economists, real estate experts, and investment and market strategists compile projections for the future of home price appreciation and the output is the Home Price Expectation Survey. In the latest release, it forecasted home prices to continue appreciating over the next five years. The rate of appreciation will moderate over the next five years as the market shifts away from the unsustainable pace we all saw during the pandemic. After this year, experts project home price appreciation to continue, but at levels that are more typical for the real estate market.
As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR) states: "People should not anticipate another double-digit price appreciation. Those days are over....... We may return to the more normal price appreciation of 4-5% a year."
For a typical consumer, the ongoing appreciation should give you peace of mind that your investment in home ownership is worthwhile because you are buying an asset that's projected to grow in value in the years to come.
What Does that Mean for You?
To give you an idea of how this could impact your net worth, here's how a typical home could grow in value over the next few years using the expert price appreciation projections mentioned above.
Potential growth in household wealth over the next 5 years is based solely on an increase in home equity if you purchased in January 2022 a home for $390,000; in January 2023 its value would be $426,270; in January 2024 its value would be $444,131; January 2025 it's value would be $457,988; January 2026 it's value would be $473,834, and January 2027 it's value would be $492,787. Total Equity Gain of $102,787 in 5 years.
Even at a more typical pace of appreciation, you still stand to make significant equity gains as your home grows in value and that's what's at stake if you delay your plans.
If you're ready to become a homeowner, know that buying today can set you up for long-term success as your asset's value (and your own net worth) is projected to grow with the ongoing home price appreciation projections.
source: KCM, Pulsenomics, HPES Q2, 2022
Disclaimer: The above information is from sources believed reliable but should not be relied upon without verification. The publisher assumes no responsibility for its accuracy. You are encouraged to get independent legal advice before commencing any transaction.
