Why Buying a Home Is a Sound Decision
If you're considering purchasing a home, you want to be confident that your decision will be sound. 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 Coming Years
Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in their latest quarterly Home Price Expectation Survey (HPES). The report predicts what will happen to home prices over the next five years. Following a mild depreciation this year, these experts predict that 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 home price appreciation while others may see depreciation. When they look further ahead, they see consistent price appreciation in the long run. That's an excellent example of why homeownership triumphs over time.
How Does This Affect You?
When you buy a home, price appreciation increases the value of your home, which increases your household wealth. Here's how the value of a typical home could change over the next few years, based on the survey's expert price appreciation projections (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.
While home prices may fall slightly this year, experts predict that they will rise over the next five years. If you're ready to buy a home, know that doing so now can set you up for long-term success as home values (and your own net worth) rise. Begin the home-buying process today by collaborating with a local real estate agent.
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