Why Homeownership Wins in the Long Run

<article class="post-727274 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-727274"><span class="entry-date">June 27, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Why Homeownership Wins in the Long Run</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Why+Homeownership+Wins+in+the+Long+Run&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwhy-homeownership-wins-in-the-long-run%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Why Homeownership Wins in the Long Run Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230627-why-homeownership-wins-in-the-long-run.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>Today’s higher <a href="https://www.simplifyingthemarket.com/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">mortgage rates</a>, <a href="https://www.simplifyingthemarket.com/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">inflationary pressures</a>, and concerns about a potential <a href="https://www.simplifyingthemarket.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">recession</a> have some people questioning: <em>should I still buy a home this year?</em> While it’s true this year has unique challenges for homebuyers, it’s important to think about the long-term benefits of <a href="https://www.simplifyingthemarket.com/2023/06/01/the-true-value-of-homeownership/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">homeownership</a> when making your decision.</p>
<p>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 <em>Fannie Mae</em> <a href="https://www.fanniemae.com/media/47726/display" rel="noopener noreferrer" style="color: blue;" target="_blank">survey</a>, 70% of respondents say they believe buying a home is a safe <a href="https://www.simplifyingthemarket.com/2023/06/06/real-estate-is-still-considered-the-best-long-term-investment-1/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">investment</a>.</p>
<p>Here’s a look at how just the home price appreciation piece can really add up over the years.</p>
<h4><strong>Home Price Growth over Time</strong></h4>
<p>The map below uses <a href="https://www.fhfa.gov/DataTools/Tools/Pages/House-Price-Index-(HPI).aspx" rel="noopener noreferrer" style="color: blue;" target="_blank">data</a> from the <em>Federal Housing Finance Agency</em> (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends.</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230626/20230627-percent-change-in-home-prices-over-5-years.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230626/20230627-percent-change-in-home-prices-over-5-years.png"/></a></p>
<p><strong>If you look at the percent change in home prices, you can see home prices grew on average by just over 56% nationwide over a five-year period.</strong></p>
<p>Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time.<strong> </strong>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 (<em>see map below</em>):</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230626/20230627-percent-change-in-home-prices-since-q1-1991.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230626/20230627-percent-change-in-home-prices-since-q1-1991.png"/></a></p>
<p><strong>The second map shows, nationwide, home prices appreciated by an average of over 290% over a roughly 30-year span.</strong></p>
<p> This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost 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.</p>
<p>And while you may have heard talk in late 2022 that <a href="https://www.simplifyingthemarket.com/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">home prices</a> would crash, it didn’t happen. Even though home prices have moderated from the record peak we saw during the <a href="https://www.simplifyingthemarket.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">‘unicorn’ years</a>, prices are already <a href="https://www.simplifyingthemarket.com/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">rebounding</a> in many areas today. That means, in most markets, your home should grow in value over the next year.</p>
<p>The alternative to buying a home is <a href="https://www.simplifyingthemarket.com/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: blue;" target="_blank">renting</a>, 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.</p>
<h3>Bottom Line</h3>
<p>If you’re questioning if it still makes sense to buy a home today, remember the incredible long-term benefits of homeownership. If you’re ready to start the conversation, reach out to a real estate professional today.</p>
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