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The Long-Term Benefit of Homeownership

Thursday, October 6, 2022   /   by Laura Larson

The Long-Term Benefit of Homeownership

Some people are wondering whether they should still purchase a home this year in light of the current changes in the housing market, the rise in mortgage rates, and the intensifying economic worries. Although these concerns are real, it's crucial to consider the advantages of homeownership in the long run when making your choice.

Think about it: it's probably difficult to find someone who regrets buying a property if you know someone who did it five, ten, or even thirty years ago. How come? The explanation is related to how equity and wealth are built up when home values increase over time.

According to the National Association of Realtors (NAR): "Gains in home equity are generated by both price growth and principal repayment on the mortgage."

Here is an example of how only the home price appreciation component might pile up over time.

Home Value Increases
Even if the rise in home prices has slowed this year, recent years have seen a significant rise in property values.

The average homeowner who purchased a home thirty years ago had their home almost triple in value over that time, according to the national data, even if home price increase varies by state and local location. This is the reason why homeowners who made their purchase of a home years ago are still pleased with it.

Home price growth is still anticipated to occur nationally in 2023, analysts say, even if it slows this year as the market cools. This means that even though the rate of increase will be less than it was at the market's peak frenzy when values surged, your house should still increase in value over the course of the upcoming year in most markets.

Renting is an alternative to buying a home, but rental costs have been rising for years. So why pay rent and endure yearly lease increases when there is no long-term financial gain? Instead, think about purchasing a home. It's a financial commitment toward your future that might position you for long-term success.

Bottom Line
Don't let the fluctuating economy thwart your aspirations. According to historical data, house values normally increase with time, which boosts your net worth. Contact Laura Larson now if you're prepared to take the first step toward becoming a homeowner.