Your Home Is a Powerful Investment

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Going into 2023, there was a lot of talk about a potential recession that would cause the housing market to collapse. Some in the media even predicted that home prices would fall by 10-20%, which may have made you reconsider buying a home.

But here's what happened: home prices increased more than usual. Brian D. Luke, Head of Commodities for S&P Dow Jones Indices, explains:

"Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years."

To put last year's growth in context, the graph below uses Freddie Mac data on how home prices have changed each year since 1980. The dotted line depicts the long-term average for appreciation.

a graph showing the average of a home appreciation

The main takeaway? Home prices almost always rise.

As a Forbes article states:

". ..The US real estate market has a long and consistent track record of increasing in value over time."

In fact, home prices have only fallen once since 1980, during the housing market crash (shown in red in the graph above). Fortunately, the market today is not what it was in 2008. For starters, there aren't enough available homes to meet current buyer demand. Furthermore, homeowners now have a significant amount of equity, putting them in a much better position than they were previously. This means there will be no wave of foreclosures, causing prices to fall.

The fact that home values increased every year except those four in red demonstrates why owning a home can be one of the best investments you can make. A homeowner owns something that typically increases in value over time. And as the value of your home increases, so does your net worth.

So, if you're financially secure and prepared to cover the costs and expenses of homeownership, purchasing a home may make a lot of sense for you.

Bottom line.

Home prices almost always increase over time. That makes purchasing a home a wise decision if you're ready and able. Let's talk about your goals and what is available in our area.

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