Over 100,000 Reasons To Purchase A Home This Year

We have OVER 100,000 reasons that you should purchase a home this year.

There is always room to debate “buying a home vs. renting one” and what the financial benefits areThe financial benefits of buying a home versus renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.

According to the latest research from the National Association of Realtors (NAR):
“Homeownership is a key pathway to building wealth and narrowing the racial income and wealth inequality gap. Housing wealth (equity) accumulation takes time and is built up by price appreciation and paying off the mortgage.”

When you increase your wealth, the equity builds for the individual that owns it.  The wealth that you start building now can be passed down to future generations. The Federal Reserve said in an addendum to their Survey of Consumer Finances: “There are numerous ways families can transmit wealth and resources across generations. Families can directly transfer their wealth to the next generation in the form of a bequest.”

So how do you start building wealth over time by owning a home?

The NAR research reveals that the average gain for homeowners over the last five years was $139,134 and over the last 10 years was $218,505. Homeownership helps you build household wealth that helps you move more easily to the home of your dreams down the road.

As Mark Fleming, the Chief Economist at First American, explains: “As homeowners gain equity in their homes, they are more likely to consider using that equity to purchase a larger or more attractive home – the wealth effect of rising equity.”

Did you miss out on the equity gains over the last 30 years?  Don’t worry!  Experts in the industry are still predicting substantial growth in equity over the next few years.

The most recent Home Price Expectation Survey, expects home values (and therefore equity) to increase as follows:

2021: 11.74%
2022: 5.82%
2023: 3.94%
2024: 3.56%
2025: 3.55%

Add that all up…  that's a 31.8% cumulative appreciation over the next five years. Using those annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:

That’s a potential increase in household wealth of $111,285 over the next five years!!!

So where do you go from here?

Owning a home is one of your best options for building your wealth over time.  If you are ready to discuss your options, we are ready to help!  The single largest purchase you may make for your household is a home.  As your investment appreciates in value, the financial options also increase plus your home wealth can impact your future generations.

Want to know what your property is worth right now. Click HERE.

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