Unpacking the Long-Term Benefits of Homeownership
If you're thinking about purchasing a home soon, increased mortgage rates, rising property prices, and continued affordability worries may make you question if it's still a good time to do so. While those market factors are significant, there is more to think about. You should also consider the long-term benefits of owning.
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, 76% 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 Increases Over Time
The map below illustrates how significant price increases have been over the last five years using data from the Federal Housing Finance Agency (FHFA). Furthermore, because housing prices vary by region, the map is divided into regions to better express wider 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 57% 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 297% 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.
And, despite predictions throughout the year that housing prices would plummet, this has not occurred. In fact, economists predict that housing values will continue to grow for the foreseeable future.
If you're wondering if buying a home now is still a good investment, consider the long-term benefits of homeownership. Let's talk when you're ready to begin your home-buying experience.