Why Homeownership Wins in the Long Run

Higher mortgage rates, inflationary pressures, and concerns about a future recession have some individuals wondering if they should still buy a home this year. While this year presents unique hurdles for homebuyers, it is critical to consider the long-term benefits of homeownership when making your selection.

Consider this: if you know somebody who bought a property 5, 10, or even 30 years ago, you're unlikely to find anyone who regrets their decision. Why is this the case? The explanation is related to how house values rise over time and, as a result, how your personal wealth rises. That could explain why, according to a recent Fannie Mae survey, 70% of respondents believe buying a home is a secure investment.

Here's an example of how only home price appreciation may pile up over time.

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.

When looking at the percentage change in home prices, you can see that over a five-year period, home prices increased by slightly over 56% on average nationwide.

Some regions are slightly higher or lower than the national average, although property prices have risen steadily in recent years. And if you extend that time range even further, the value of homeownership and the significant profits earned by homeowners over the years become further evident (see map below):

The second map illustrates that over a 30-year period, property values increased by an average of more than 290% nationwide.

This national average indicates that the ordinary homeowner who purchased a home 30 years ago saw their home nearly treble in value during that time. That is a major reason why so many homeowners who purchased their homes years ago are still pleased with their decision.

The second map illustrates that over a 30-year period, property values increased by an average of more than 290% nationwide.

This national average indicates that the ordinary homeowner who purchased a home 30 years ago saw their home nearly treble in value during that time. That is a major reason why so many homeowners who purchased their homes years ago are still pleased with their decision.

Bottom Line
If you're wondering if it's still a good time to buy a house, consider the great long-term rewards of homeownership. Contact a real estate expert today if you're ready to start the conversation.

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