Why Should You Buy a Home This Year?

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The financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner. An increase in equity builds the wealth of the individual that owns it. This wealth can be passed down to future generations. National Association of Realtors research reveals that the average gain for homeowners over the last five years was 139,134 and over the last 10 years was 218,505.

Homeownership builds household wealth which also enables households to more easily move to the home of their dreams.

If you missed out on the equity gains over the last 30 years, don’t fret. Experts are still calling for substantial growth in equity over the next five years. The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home values (and therefore equity) to increase as follows:

> 2021: 11.74%
> 2022: 5.82%
> 2023: 3.94%
> 2024: 3.56%
> 2025: 3.55%

The survey estimates a 31.8% cumulative appreciation over the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a 350,000 home as an example:

That’s a potential increase in household wealth of 111,285 over five years.

If you want to learn more, DM me. Owning a home is one of the best ways to grow your wealth over time. House wealth can impact generations. In many cases, the largest single investment a household has is their home. As that investment appreciates in value, the financial options also increase.