Why Buying a Home is a Sound Decision
If you are thinking about buying a home, you want to know the decision will be a good one. That means thinking about what home prices are projected to do in the coming years. How will that impact your investment?
This year, we aren’t seeing home prices fall dramatically. As the year goes on, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the long-term view in mind. Experts project a return to a steadier rate of price appreciation in the year’s that follow.
Home Price Appreciation in the Years Ahead
Over 100 economists, investment strategists, and housing market analysis were polled by Pulsenomics in their latest quarterly Home Price Expectation Survey. The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.
Experts aren’t forecasting a drastic fall in home prices nationally. Some markets however will see home price appreciation while others may depreciate.
What Does This Mean for You
Price appreciation raises your home’s value once you purchase. That grows your household wealth. Here’s how a typical home’s value could change over the next few years.
In this example, if you bought a $400,000 home at the beginning of this year, you could accumulate over $54,000 in household wealth over the next five years. So, if you are wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.
Bottom Line
According to the experts, while we may see slight depreciation this year, home prices are expected to grow over the next five years.