111,285 Reasons to Buy a Home this Year

111,285 Reasons to Buy a Home this Year

In today's real estate market, buying a home is more lucrative than ever. In fact, according to recent research from the National Association of Realtors (NAR), it turns out that as a buyer you may be able gain not only financial security but also wealth building opportunities by purchasing property instead of renting one!
The latest study looked at homeowners who had been living in their houses for three years or less- those are people just getting started on this journey called "homeownership." They found:

Homeownership is a key pathway to building wealth housing wealth (equity) accumulation takes time and is built up by price appreciation and paying off the mortgage.”

A report by the Federal Reserve found that an individual's equity in their home is worth more than just money. It builds up their networth, which can be passed down through generations to come!

The Survey of Consumer Finances teaches us how important having good credit with low-interest rates or no cost at all really does wonders when you think about what this could do not only for yourself but also future descendants who will inherit your wealth if things go well.

“There are many ways that families can pass on the wealth they accumulate to future generations. They might make a bequest, provide gifts from their estate or inheritance funds before dying - for example providing down payment support in order to purchase property- and also allow direct transfers between spouses if one spouse dies without leaving an will."

Here’s a look at how equity can build your wealth over time when you own a home.

In the last 30 years, homeowners have been gaining equity. The average gain for a homebuyer over this period was $139K and in some cases it can be up to half-a million dollars!
How much did your parents save when they bought their house? thirty years ago at median prices of 103k with 10% down payments loan - not bad if you're able take advantage now while inflation is low. And don't forget: selling back then would've left them even richer than before (and no one else could get rich off such an investment either).

Homeownership builds wealth and gives people more options in their life. This is because when we own our homes, the equity from that allows us to purchase a larger or better house than if we were renting- which can be seen as an investment for your future happiness!
The Chief Economist at First American has said “As homeowners gain equity in their homes , they will think about using it by buying something bigger with all this extra money."

If you missed out on the equity gains over the last 30 years, don’t fret. Experts are still calling for substantial growth in equity over the next five years.

Looking Forward at the Equity To Come
For years, people have been predicting that home prices will never go down. But this latest study from a group of respected economists and real estate experts has some bad news for hopeful buyers: they expect values (and therefore equity) to decrease as follows:

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

The survey estimates a 31.8% cumulative appreciation over the next five years, which means you could be earning almost 40K by 2032! Using their annual projections and an example from 2013 ($350k), here's what your equity build-up would look like:

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

Bottom Line

Owning a home is one of the most important financial decisions you can make. The value of your house will grow over time, and that means bigger paychecks for yourself or even just reducing interest payments on loans with low rates!

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