Why Buying a Home Is a Sound Decision

<article class="post-656958 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-656958"><span class="entry-date">March 23, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Why Buying a Home Is a Sound Decision</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+Buying+a+Home+Is+a+Sound+Decision&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwhy-buying-a-home-is-a-sound-decision%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 Buying a Home Is a Sound Decision Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230322-why-buying-a-home-is-a-sound-decision-KCM.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re <a href="https://www.simplifyingthemarket.com/2023/02/23/how-to-make-your-dream-of-homeownership-a-reality/" rel="noopener noreferrer" target="_blank">thinking</a> about <a href="https://www.simplifyingthemarket.com/2023/03/09/4-tips-for-making-your-best-offer-on-a-home/" rel="noopener noreferrer" target="_blank">buying</a> a home, you want to know the decision will be a good one. And for many, that means thinking about what home prices are <a href="https://www.simplifyingthemarket.com/2023/03/20/whats-ahead-for-home-prices-in-2023/" rel="noopener noreferrer" target="_blank">projected to do</a> in the coming years and how that could impact your investment. </p>
<p>This year, we aren’t seeing home prices fall dramatically. As the year goes on, however, some markets may go up in value while others may lose value. That’s why it’s helpful to keep the <a href="https://www.simplifyingthemarket.com/2023/02/27/one-major-benefit-of-investing-in-a-home/" rel="noopener noreferrer" target="_blank">long-term</a> view in mind. Experts project a return to a steadier rate of price appreciation in the years that follow.</p>
<h4><strong>Home Price Appreciation in the Years Ahead</strong></h4>
<p>Over 100 economists, investment strategists, and housing market analysts were polled by <em>Pulsenomics</em> in their latest quarterly <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank"><em>Home Price Expectation Survey</em></a> (HPES). The report indicates what they believe will happen with home prices over the next five years. As the graph below shows, after mild depreciation this year, these experts forecast home prices will return to more normal levels of appreciation through 2027.</p>
<p><a href="https://files.keepingcurrentmatters.com/content/images/20230321/20230327-estimated-national-price-performance-MEM.png" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230321/20230327-estimated-national-price-performance-MEM.png"/></a></p>
<p>The big takeaway is experts aren’t forecasting a drastic fall in home prices nationally, even though some markets will see home price appreciation while others may depreciate. And when they look further out, they see steady price appreciation in the long run. That’s a great example of why homeownership wins over time.</p>
<h4><strong>What Does This Mean for You?</strong></h4>
<p>Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. Here’s how a typical home’s value could change over the next few years using the expert price appreciation projections from the survey mentioned above (<em>see graph below</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/content/images/20230321/20230327-potential-growth-in-household-wealth-hpes-MEM.png" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230321/20230327-potential-growth-in-household-wealth-hpes-MEM.png"/></a></p>
<p>In this example, if you bought a $400,000 home at the beginning of this year and factor in the forecast from the HPES, you could accumulate over $54,000 in household wealth over the next five years. So, if you’re wondering if buying a home is a sound decision, keep in mind what a strong wealth-building tool it is long term.</p>
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