Today's higher mortgage rates, inflationary pressures, and concerns about a potential recession have some people questioning: should I still buy a home this year? While it's true this year has unique challenges for homebuyers, it's important to think about the long-term benefits of homeownership when making your decision.
Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you're probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae survey, 70% of respondents say they believe buying a home is a safe investment.
Here's a look at how just the home price appreciation piece can really add up over the years.
Data from the Federal Housing Finance Agency (FHFA) shows just how noteworthy price gains have been over the last five years. In the Mountain Region in the United States, the percent change in home prices grew on average by just over 66% nationwide over a five-year period. Some areas are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer.
Nationwide, home prices in the mountain region in the U.S. appreciated by an average of over 457% over a roughly 30-year span. This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home more than triple in value over that time. That's a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.
The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and deal with annual lease hikes for no long-term financial benefit? Instead, consider buying a home.
If you're questioning if it still makes sense to buy a home today, remember the incredible long-term benefits of homeownership.
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